Press Release No. 01/32

Press Release: IMF Executive Board Reviews Noncomplying PRGF Disbursement to Ghana

June 28, 2001

The Executive Board of the International Monetary Fund (IMF) reviewed a noncomplying disbursement to Ghana of SDR 26.75 million (about US$34 million) under its three-year Poverty Reduction and Growth Facility (PRGF) arrangement. Subsequent to the disbursement in August 2000 (see Newsbrief 00/71), it became apparent that the information available to the Fund at the time of approval of the disbursement was incorrect. This information related to a prior action on clearance of external payments arrears and to a performance criterion on nonconcessional external borrowing. As a result of these inaccuracies in the information, the disbursement is deemed to be noncomplying.

The Executive Board decision is in the context of the strengthened safeguards adopted in April 2000 on the use of IMF financial resources (see PIN 00/28).

The Executive Board also completed the third review of Ghana's PRGF arrangement. The completion of this review allows Ghana to draw up to SDR 52.58 million (about US$66 million--see Newsbrief 01/50).

Following the Executive Board's discussion on Ghana, the Deputy Managing Director and Acting Chairman, Eduardo Aninat, stated: "The reporting of inaccurate information took place under the previous government. The new government has been very forthcoming and cooperative throughout the enquiries into these problems and has taken steps to prevent future occurrences, including stricter procedures for authorizing external borrowing and enhanced monitoring of external debt payments. The Executive Board welcomes the new government's commitment to transparency and to strengthening the debt management system, for which it has requested Fund technical assistance. The Board concluded that waivers of nonobservance of the prior action and performance criterion could not be granted, and Ghana was asked to repay the noncomplying disbursement, together with any interest accrued thereon. It was agreed that Ghana could repay the Fund in two tranches of SDR 13.75 million by July 15, 2001, and SDR 13 million by end-December 2001."