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Creditors assurances critical to securing $3bn IMF loan programme

Ghana needs assurances from its creditors and partners that it will meet its debt obligations to secure the approval of the Management and Executive Board of the International Monetary Fund (IMF) for the $3 billion loan-support programme.

Mr Stéphane Roudet, the IMF Mission Chief for Ghana, said this at a press briefing in Accra after Ghana and the Fund reached a Staff-Level Agreement (SLA) on Tuesday, which is subject to the Management and Board's approval. The press briefing was jointly held by the Ministry of Finance, Bank of Ghana BoG) and the IMF.

The loan support programme is aimed at restoring Ghana's macroeconomic stability and debt sustainability to protect the vulnerable, preserve financial stability, and lay the foundation for strong and inclusive recovery and growth.

The $3bn, when secured, would be used to support the implementation of the Government's three-year Enhanced Domestic Programme, restore macroeconomic confidence and alleviate the plight of Ghanaians amid the current economic hardship.

Mr Roudet said: "What is necessary for us to be able to present that programme request to the Board is assurances from Ghana's partners and Ghana's creditors that the program is fully financed."

"So, as soon as we have assurances from creditors that is the case, when it's sufficient for them to be made on that front, we will be able to present the programme to our Board," he added.

He noted that the Ghanaian authorities have committed to a wide-ranging economic reform

programmes, built on the Government's Post-COVID-19 Programme for Economic Growth (PC-PEG), to help tackle the deep challenges facing the country.

The Mission Chief assured that the Fund would ensure that measures were put in place to strengthen public expenditure commitment controls, improve fiscal transparency including the reporting and monitoring of arrears.

Mr Roudet indicated that the Fund-support programme would help improve the management of public enterprises and tackle structural challenges in the energy and cocoa sectors to propel sustainable and inclusive growth.

Mr Ken Ofori-Atta, the Finance Minister, underscored the role of creditors in securing the loan and said: We can only get to the IMF Board if we get sufficient commitment from our creditors in support of the debt operation."

He said the Government would leverage on the positive reaction of the announcement of reaching the Staff Level Agreement with the IMF, "to the very moment when the IMF Executive Board approves the programme request."

Mr Ofori-Atta called for continued support by Ghanaians and all stakeholders to Government's efforts to restore macroeconomic stability and promote robust and inclusive growth.

"Ghana stands ready to complete all Prior Actions before the end-March 2023 but more importantly, Ghana is committed to the IMF Programme as a whole," the Finance Minister said.

Key deliverables of the programme include the preparation of the PC-PEG), a medium-term macroeconomic framework, Debt Sustainability Analysis (DSA) and Debt Management Strategy.

Others are reforms to address structural bottlenecks, improve competitiveness and promote efficiency and effectiveness, a memorandum of Economic and Financial Policies (MEFP), and an agreement on Prior Actions, which are expected to be completed before the Agreement goes to the Board.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.