IMF comes to Ghana’s aid with $3 billion loan

Ghana on Wednesday secured a $3 billion bailout from the International Monetary Fund (IMF), as per a Reuters report. 

“Congratulations to President @NAkufoAddo & his team on the $3 billion IMF-supported program approved by our Executive Board. We stand with Ghana as it implements reforms to address the current economic and financial crisis and help build a better future for all Ghanaians,” said IMF Managing Director Kristalina Georgieva in a tweet.

Congratulations to President @NAkufoAddo & his team on the $3 billion IMF-supported program approved by our Executive Board.

We stand with Ghana as it implements reforms to address the current economic and financial crisis and help build a better future for all Ghanaians.

— Kristalina Georgieva (@KGeorgieva) May 17, 2023

The initial disbursement of approximately $600 million is crucial for Ghana’s ongoing economic recovery, reports said. Another $600 million will be released in November, reports added. The remaining funds are expected to be disbursed in equal portions of $350 million every six months, subject to regular IMF reviews.

Ghana, with its economy already burdened by the COVID-19 pandemic and the Russia-Ukraine war, has implemented several tough economic measures to secure the IMF package, including tax increases and imposing losses on domestic investors.

Additionally, Ghana has obtained financial assurances from a bilateral-creditors group co-chaired by China and France, further bolstering its efforts to stabilize the economy.

The $3 billion loan program, spanning three years, seeks to replenish Ghana’s foreign-exchange reserves, which have plummeted nearly 50 percent since reaching a peak in August 2021. The central bank significantly utilised these reserves to defend the cedi against external pressures.

While the IMF loan provides a much-needed lifeline, Ghana continues its efforts to secure additional financial support. The government is currently in talks with the World Bank for an extra $900 million of budget support over three years. Simultaneously, negotiations with Eurobond holders to restructure $13 billion of debt owed to private investors are also underway.