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### Executive summary: program status and key outcomes
- IMF arrangement: May 2023 approval of a 36-month arrangement under the Extended Credit Facility in the amount of 303.8 percent of quota (SDR 2.2419 billion, or about US$3 billion).
- Access on completion of the third review: additional SDR 269.1 million, about US$360 million, bringing total disbursements since program approval to about US$1.9 billion.
- Program performance: generally satisfactory; all end-June 2024 performance criteria (PCs) and indicative targets (ITs) were met.
- Structural benchmarks: five out of seven structural benchmarks due between June and October 2024 were met; some delays remain.
- Political calendar risk: December 7, 2024 general elections; authorities reiterated strong commitment to program policies and reforms.

### Recent economic developments and macro outlook
- Growth:
  - Real GDP growth: 6.9 percent in 2024Q2, 4.7 percent in 2024Q1, and 3.8 percent in 2023Q4.
  - Staff revised 2024 growth projection to 4.0 percent (previously 3.1 percent); medium-term potential around 5 percent.
- Agriculture and dry spell:
  - Authorities estimate up to 10 percent of agricultural production could be affected, potentially impacting up to one million farmers.
  - World Bank study estimate: total losses could range between 0.7 and 1.5 percent of GDP, concentrated in crop production and investment expected in 2024Q3.
  - Government measures: temporary ban on rice, corn, and soy exports; additional imports of maize, rice, and poultry; purchases of fertilizers and seeds.
- Inflation:
  - Headline inflation: 22.1 percent in October (down from 23.5 percent in January; peak 54.1 percent in December 2022).
  - Food inflation: 22.8 percent (declined from 27 percent).
  - Staff projection: inflation set to reach 18 percent by end-2024 (revised up from 15 percent) and return to Bank of Ghana target band (8±2 percent) by end-2025 with continued tight monetary policy.
- External sector and reserves:
  - Current account: surplus of 1.4 percent of GDP at end-June 2024 (versus a deficit of 1.4 percent at end-2023).
  - Trade balance (Jan–Aug 2024): surplus of 3.1 percent of GDP (versus 1.5 percent same period last year).
  - Gross international reserves (GIR): US$4.5 billion (1.9 months of prospective imports) at end-June 2024; US$5 billion at end-September 2024.
  - Program target: reach 3 months of import coverage by end of program (end-2026 target reiterated in annex).
- Fiscal and banking developments:
  - Fiscal consolidation progressed on buoyant non-oil revenue and prudent spending execution; authorities cleared significant arrears in H1 2024 but accumulated new payables, notably in the energy sector.
  - Banking sector: capital adequacy improved Dec-2023 to Jun-2024; about two-thirds of banks now compliant with prudential capital adequacy standards without reliefs.
  - NPL ratio: increased to 24.1 percent at end-June 2024 (18.8 percent at end-June 2023).
  - GFSF injections: GHS 4.9 billion among other capital injections.

### Debt restructuring and DSA outcomes
- Progress:
  - Domestic debt restructuring completed in 2023.
  - Eurobond exchange completed in October 2024 for a large majority of commercial creditors.
  - MoU with Official Creditor Committee (OCC) agreed in June 2024; most OCC members signed; bilateral agreements expected by June 2025.
- Staff baseline assumptions:
  - Full post-restructuring macro-framework incorporating domestic debt restructuring, treatment of official bilateral claims agreed with OCC, Eurobond exchange; residual other external commercial claims treated consistent with authorities’ strategy and comparability-of-treatment principle.
- Risk assessment:
  - Ghana assessed at high risk of debt distress in the near term due to near-term breaches of DSA thresholds but expected to reach moderate risk of debt distress in the medium term with all DSA sustainability targets met by 2028.
  - DSA targets by 2028: PV of total debt-to-GDP of 55 percent; external debt service-to-revenue ratio of 18 percent.
- Financing:
  - Exceptional financing gap closed in baseline with international reserves reaching 3 months of imports at the end of the program (program financing table and external financing schedules provided).

### Fiscal policy, budget execution, and social spending
- 2024 Mid-Year Budget Review (MYBR) and targets:
  - Authorities intend to adhere to approved 2024 Budget: primary surplus (commitment basis) of 0.5 percent of GDP driven by a 0.9 percent of GDP improvement in non-oil revenue.
  - MYBR implemented limited spending reallocations and revenue adjustments.
  - 2025 Budget: submission delayed to March 2025 due to elections; “Expenditure in Advance of Appropriation” Bill passed as transitory budget covering Q1 2025, with transitory ceilings consistent with achieving a primary surplus of 1.5 percent of GDP and measures to permanently raise non-oil revenue by at least 0.6 percent of GDP annually.
- 2024 MYBR table highlights (percent of GDP, sequence shown in table):
  - Total Revenues: 16.8 / 16.9 / 16.8 / 17.1
  - Non-Oil Revenues: 15.1 / 15.1 / 15.1 / 15.2
  - Primary balance (commitment basis): 0.5 / 0.5 / 0.5 / 0.5
  - Energy Sector Transfer: 1.7 / 1.6 / 1.8 / 2.2
  - Capital Expenditures: 2.7 / 3.2 / 2.7 / 3.0
  - Highly-targeted social spending (GSFP, NHIS, LEAP, and Capitation Grant): 0.53 / 0.55 / 0.53 / 0.53
  - Memorandum GDP (bn GHS): entries include 105 / 110 / 120 / 1054 / 1054
  - Non-oil primary balance entries include -0.89 / -1.01 / -0.90 / -1.20
- Budget execution risks and offsets:
  - Emerging spending pressures: energy transfers +0.6 percent of GDP; dry spell measures +0.2 percent of GDP; higher-than-anticipated concessional project loan disbursements +0.2 percent of GDP.
  - Offsets: higher program expenditure ceilings and larger nominal GDP revision +0.7 percent of GDP; internal reallocations +0.1 percent of GDP; greater-than-expected oil and non-oil revenue each +0.1 percent of GDP.
- Social protection:
  - Extreme poverty: 29.5 percent of population living in extreme poverty (US$2.15 per day) in 2023, up 3.1 percentage points from prior year.
  - LEAP: more than doubled since 2022; indexation introduced.
  - Planned 2025 actions: expand LEAP to 400,000 households by end-September 2025 (new SB); implement a 35-percent increase in GSFP budget allocation; increase NHIS resources; expected social allocations monitored under IT to rise to 0.6 percent of GDP in 2025.

### Structural fiscal reforms, revenue administration, and PFM
- Fiscal Responsibility Act (draft FRA) submitted to parliament (end-October 2024 SB):
  - Establishes debt anchor: debt-to-GDP ratio of 45 percent by 2034.
  - Operational target: primary balance on commitment basis to ensure achievement of the debt anchor.
  - Defines escape clauses and provides legal ground to reform the Fiscal Council.
- Domestic revenue mobilization:
  - GRA measures: strengthened VAT enforcement on residential accommodations; enhanced audits of large taxpayers; roll-out of e-VAT; cleansing of taxpayer registry (end-June 2024 SB) expected to be completed within weeks; operationalization of ITAS expected by end-December 2024 (SB).
  - MTRS aims to significantly increase tax revenue over 2024–27; mid-implementation review planned in early 2026.
- PFM and procurement:
  - Enabled “Blanket Purchase Agreement” in GIFMIS (end-September 2024 SB); integrate GHANEPS with GIFMIS by end-December 2024 (SB).
  - Target: increase share of procurements (by value) registered in GHANEPS to 90 percent of total procurements by 2025Q4 (intermediate targets: 50 percent by 2025Q2).
  - TSA and GIFMIS onboarding: onboarding of 549 MDAs and MMDAs accounts onto GIFMIS target end-March 2025 (SB); TSA integration by end-March 2026.

### Energy sector: shortfall, legacy arrears, and reform package
- Fiscal impact and shortfall:
  - Energy sector shortfall likely about 0.6 percentage points of GDP larger than previously expected, bringing total shortfall to about 2.2 percent of GDP in 2024.
  - Legacy arrears at end-December 2023: US$2.1 billion or 2.8 percent of GDP to IPPs and private fuel suppliers (included in DSA debt perimeter).
- Immediate and medium-term measures under the ESRP:
  - Immediate: 3 percent average electricity tariff increase as of October 1, 2024; cease procurement of costly liquid fuel and switch to natural gas; launch ECG revenue drive in 2024Q4; require ECG to secure MoF and Ministry of Energy approval for new capital expenditures not in 2022 Major Tariff Review; draft ToR to prepare restructuring strategy to open ECG to private sector participation (prior action).
  - Medium-term: finalize energy sector legacy debt validation audits (2023 by March 2025; 2024 by August 2025); PURC to continue quarterly tariff adjustments and publish technical notes; publish audited quarterly validation of ECG revenue/collection accounts with unqualified opinion by end-January 2025 (new proposed SB); publish monthly CWM Validation reports.
- Program aims:
  - Prevent further arrears accumulation; renegotiate PPAs to reduce capacity charges; increase gas consumption; adopt least-cost fuel procurement; improve payment mechanisms (national gas clearing house) and impose strict CWM compliance.

### Cocoa sector and Cocobod turnaround
- Turnaround strategy objectives:
  - Restore Cocobod’s financial sustainability via stronger financial oversight; maintain producer price within 60-70 percent of international prices (to balance farmers’ share and Cocobod costs); rationalize costs; phase out quasi-fiscal activities.
  - Cocoa desk established at MoF; Fund TA requested for SOE oversight strategy.
- 2023–2024 developments:
  - Weak cocoa production in FY2023/24 constrained delivery on forward sales; 2024/25 farmgate price increased by 50 percent.
  - New financing model: replace annual international banks’ loan syndication with combination of self-financing by licensed buying companies and local bank financing.
  - Cocoa roads portfolio streamlined from GHS21 billion to GHS6 billion after contract review.

### Monetary policy, exchange rate framework, and FX operations
- Monetary stance and tools:
  - BoG reduced policy rate by 300 basis points in 2024; real policy rate estimated at some 5-7 percent.
  - BoG signaled intention to maintain tight policy to reach inflation target band by end-2025; rapid growth in broad money suggests need for additional liquidity absorption.
  - Substitution of OMOs with CRR shifted costs to financial sector; BoG to review policy mix to ensure objectives without undue costs.
- FX reforms and interventions:
  - September 2024: BoG adopted more robust FX reference rate computation method (end-August 2024 SB) to converge with wholesale FX market benchmark.
  - Launch of 7-day FX forward sale auctions with multiple-price allotment; plan to develop comprehensive FX intervention policy and transparent auction-based FX allocation.
  - MCPs identified; most recent impermissible spreads arose September 9–12, 2024 for government, cocoa, and remittances; staff recommends gradual removal of certain CFMs once reserve levels adequate.
- BoG safeguards and recapitalization:
  - Progress on 2023 safeguards assessment recommendations slow; Cabinet approved draft BoG Act amendments in June; amendments to be submitted to Parliament by end-May 2025 (proposed new SB).
  - MoF and BoG preparing MoU for gradual recapitalization of central bank to recover from domestic debt restructuring impact; options include budgetary or asset transfers, suspension of profit transfers, or use of program-generated buffers.

### Financial sector stability, recapitalization, and AML/CFT
- Bank recapitalization and supervision:
  - Most banks on track to meet recapitalization targets; BoG requires banks with NPL ratios >10 percent to submit credit action plans.
  - GFSF: GFSF Fund A2 component recapitalization totals indicated (GHS5.25 billion and GHS0.25 billion for specified uses).
  - NIB recapitalization: MoF injected GHS800 million June–October 2024; target total injections GHS1.85 billion to bring NIB CAR to non-negative position by end-2024 (SB); special investigation ToR finalized; international firm recruitment to complete exercise by end-2024 to inform restructuring plan by end-March 2025 (SB).
  - Suspension of dividend payments for all banks until further notice; BoG to lift forbearances and phase out temporary reliefs per schedule.
- Financial soundness indicators (selected):
  - Regulatory capital to risk-weighted assets: e.g., 17.8 / 17.8 / 15.6 / 21.9 / 20.9 / 19.8 ... (selected series).
  - Nonperforming loans to total gross loans: 14.7 / 17.3 / 21.6 / 18.2 / 13.9 / 14.8 / 15.1 / 14.8 / 20.6 / 24.1 (selected end-period values).
  - Provisions to NPLs: 69.3 / 72.5 / 77.7 / 71.5 / 82.2 / 84.3 / 83.2 / 87.9 / 73.2 / 75.7.
- AML/CFT and BO transparency:
  - Financial Intelligence Center to complete National Risk Assessment by end-2024; ORC rolling out new registrar system to enhance BO transparency; BO register system expected to go live by end-2024; proportionate sanctions to apply starting 2025.

### Program financing, capacity to repay, and IMF access/phasing
- Program financing (excerpted figures):
  - Post-restructuring financing gap: 687 / 1,754 / 1,448 / 734 / 4,623 (USD million sequence from table).
  - IMF planned disbursements in program financing schedule include SDR/US$ and percent of quota across review completions, culminating in Total: 2,241.9 SDRs / 3,000 US$ / 304 percent of quota. Ghana's quota: 738.
- Capacity to repay (CtR):
  - CtR to the Fund assessed as adequate but subject to downside risks; stock of debt to the Fund as a share of GDP peaks in 2025 at 5.1 percent of GDP.
  - Debt service obligations to the Fund will reach a peak of 10.8 percent of total debt service in 2030.
  - SDR holdings: SDR 46.5 million at end-July 2024 compared to SDR 634.3 million at end-July 2022.

### Risks, downside scenarios, and mitigation
- Downside risks (high and multichannel):
  - External: intensification of regional conflicts; spillovers from conflicts in Ukraine and the Middle East; commodity price volatility; protracted weak cocoa harvests; climate shocks.
  - Domestic: election-driven policy/reform slippages; energy sector reform delays; slow bank recapitalization; financial sector legacy risks.
  - Inflation: upside risks from slower-than-anticipated disinflation and exchange rate volatility; dry spell may raise import needs and prices.
- Stress-test findings (DSA):
  - Ghana at high near-term risk of debt distress due to near-term breaches but expected to reach moderate risk by 2028 if program and restructuring are implemented.
  - Combined contingent liability shock would push public debt well above baseline trajectory across DSA horizon.

### Program policy priorities and staff recommendations
- Fiscal:
  - Advance fiscal consolidation while protecting the vulnerable.
  - Further boost domestic revenue and better control government spending.
  - Strengthen public financial management, revenue administration, and arrears prevention.
  - Promptly address deep energy and cocoa sector challenges.
- Monetary and external:
  - Maintain prudently tight monetary policy and flexible exchange rate to bring inflation back to single digits and rebuild reserves.
  - Improve foreign exchange market operations and adopt transparent FX auction mechanisms; maintain robust FX reference rate computation.
- Financial sector and governance:
  - Continue bank recapitalization, lift regulatory forbearances, and address legacy NPLs with prompt recognition, provisioning, and recovery frameworks.
  - Strengthen governance, transparency, and anti-corruption frameworks; publish outstanding audit follow-ups (e.g., Auditor General’s follow-up on COVID-19 spending by end-2024).
- Structural reforms and growth:
  - Enact FRA amendments and operationalize an independent Fiscal Council; implement MTRS measures; reform statutory funds; integrate procurement and GIFMIS systems.
  - Implement Cocobod turnaround and energy sector recovery measures to limit fiscal risks and support inclusive growth.
- Monitoring and conditionality:
  - Program monitored semi-annually with QPCs, continuous PCs related to Article VIII, MPCC, ITs, and SBs; modifications to PCs/ITs and new SBs proposed through end-December 2025 to reflect evolving macro conditions.

*Source: IMF staff report — Executive Summary and chapter excerpts, Ghana (discussions in Accra during September 24–October 4, 2024; report dated November 13, 2024).*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Context and Program Status
- IMF arrangement: May 2023 approval of a 36-month arrangement under the Extended Credit Facility in the amount of 303.8 percent of quota (SDR 2.2419 billion, or about US$3 billion).
- Access on completion of the third review: additional SDR 269.1 million, about US$360 million, bringing total disbursements since program approval to about US$1.9 billion.
- Program performance: generally satisfactory; all end-June 2024 performance criteria (PCs) and indicative targets (ITs) were met.
- Structural reforms: some delays on the structural front; five out of seven structural benchmarks due between June and October 2024 were met.
- Political context: December 7, 2024 general elections; risks of election-driven policy slippages noted. Authorities have reiterated strong commitment to program policies and reforms.

### Recent Economic Developments
- Growth:
  - Year-over-year real GDP growth: 6.9 percent in 2024Q2, 4.7 percent in 2024Q1, and 3.8 percent in 2023Q4.
  - 2024 underlying drivers: strong performance in mining, information and communication, and construction.
- Agricultural dry spell:
  - Authorities estimate up to 10 percent of agricultural production could be affected, with potential implications for up to one million farmers.
  - World Bank study estimate: total losses could range between 0.7 and 1.5 percent of GDP, concentrated in crop production and investment expected in 2024Q3.
  - Government response: temporary ban on rice, corn, and soy exports; additional imports of maize, rice, and poultry; purchases of fertilizers and seeds.
- Inflation:
  - Headline inflation: 22.1 percent in October (down from 23.5 percent in January).
  - Food inflation: declined from 27 percent to 22.8 percent over the same period.
  - Latest staff projection: inflation set to reach 18 percent by end-2024 (revised up from 15 percent).
- External sector and reserves:
  - Current account: surplus of 1.4 percent of GDP at end-June 2024 (versus a deficit of 1.4 percent at end-2023).
  - Trade balance (Jan–Aug 2024): surplus of 3.1 percent of GDP (compared to 1.5 percent of GDP during the same period last year).
  - Gross international reserves (GIR): US$4.5 billion (1.9 months of prospective imports) at end-June 2024; US$5 billion at end-September 2024.
- Fiscal developments:
  - Fiscal consolidation progressed on buoyant non-oil revenue and prudent spending execution.
  - Authorities cleared a significant amount of arrears in H1 2024 but accumulated new payables, notably in the energy sector due to large upfront payments to IPPs while ECG continued to accumulate arrears on current bills.
- Banking sector and financial soundness:
  - Capital adequacy improved between December 2023 and June 2024; about two-thirds of banks are now compliant with prudential capital adequacy standards without reliefs.
  - Ghana Financial Stability Fund (GFSF): GHS 4.9 billion in injections among other capital injections.
  - Nonperforming loans (NPLs): NPL ratio increased to 24.1 percent at end-June 2024 (18.8 percent at end-June 2023), reflecting legacy effects from 2022 downturn, exchange rate volatility, and asset quality reviews.

### Debt Restructuring and Debt Sustainability
- Debt restructuring progress: significant progress including completion of the Eurobond exchange in October 2024 for a large majority of commercial creditors.
- Staff baseline assumptions: full post-restructuring macro-framework incorporating domestic debt restructuring, treatment of official bilateral claims agreed with the Official Creditor Committee (OCC), and the Eurobond exchange; treatment of residual claims of other external commercial creditors consistent with authorities’ restructuring strategy and comparability of treatment principle.
- Risk assessment: Ghana assessed at high risk of debt distress in the near term due to near-term breaches of DSA thresholds but expected to reach moderate risk of debt distress in the medium term with all DSA sustainability targets met by 2028.
- Exceptional financing gap: closed in baseline with international reserves reaching 3 months of imports at the end of the program.

### Program Performance Specifics
- Net international reserve (NIR) accumulation: about US$928 million, outperforming an adjusted PC target of US$463.8 million by a large margin.
- Monetary indicators: CPI inflation was within the Monetary Policy Consultation Clause (MPCC)’s lower outer band.
- Structural benchmarks: new methodology for the cedi reference rate (end-August 2024 SB) implemented in September; cleansing of the taxpayer registry (end-June 2024 SB) expected to be completed within the next few weeks from the report date.

### Outlook and Risks
- Growth outlook:
  - Staff revised 2024 growth projection to 4.0 percent (previously 3.1 percent at the 2nd ECF Review).
  - Beyond 2024: GDP growth projected to gradually increase to potential of about 5 percent.
- Inflation and monetary stance:
  - Inflation forecast: 18 percent by end-2024; continued tight monetary policy to bring inflation back to the Bank of Ghana’s target band (8±2 percent) by end-2025.
- Current account and reserves:
  - Current account deficit projected to remain in balance until 2026.
  - International reserves projected to reach 3 months of import coverage by program end.
- Downside risks (high and multichannel):
  - External: intensification of regional conflicts, spillovers from conflicts in Ukraine and the Middle East, commodity price volatility, protracted weak cocoa harvests, climate shocks.
  - Domestic: policy and reform slippages ahead of the December 2024 elections or during the political transition could undermine macroeconomic stability, worsen domestic financing conditions and debt dynamics, and complicate remaining creditor negotiations.
  - Inflation risks: tilted to the upside due to slower-than-anticipated disinflation in 2024H1 and increased exchange rate volatility; dry spell may add import needs and price pressures.
  - Energy sector: slow reform progress could widen shortfall, lead to continued arrears accumulation, risk power outages, and affect economic activity.
  - Financial sector: delays in bank recapitalization could deteriorate stability; exchange rate, credit, and liquidity risks persist.

### Policy Priorities and Discussions
- Objectives of third review discussions:
  - Advance fiscal consolidation while protecting the vulnerable.
  - Maintain a tight monetary policy and promote a flexible exchange rate to bring inflation back to single digits and rebuild foreign reserves.
  - Reform policy frameworks and institutions to entrench macroeconomic stability and debt sustainability.
  - Tackle energy and cocoa sector challenges.
  - Preserve financial stability in the wake of the domestic debt restructuring.
  - Strengthen governance and transparency.
  - Bolster private sector-led and inclusive growth.
- Fiscal policy focus:
  - Further reduce the government’s fiscal deficit and financing needs through continued efforts to boost domestic revenue and better control government spending.
  - Strengthen public financial management and revenue administration frameworks.
  - Promptly and forcefully address deep energy and cocoa sector challenges to underpin durable adjustment.
  - Protect vulnerable populations from adjustment impacts to foster an inclusive recovery.
- Monetary and external policy focus:
  - Maintain prudently tight monetary policy stance and improve foreign exchange market operations to reduce inflation and rebuild international reserves.
- Financial sector and governance:
  - Continue banking sector recapitalization and address financial sector legacy issues.
  - Strengthen governance, transparency, and implementation of structural reforms.
- Technical assistance:
  - Staff and authorities engaged on TA needs to support the reform agenda (Annex III).

*Source: IMF staff report — Executive Summary, Ghana (discussions in Accra during September 24–October 4, 2024; report dated November 13, 2024).*

### 14. The authorities have reiterated their commitment to the 2024 fiscal targets. During

### The authorities have reiterated their commitment to the 2024 fiscal targets.

### 2024 Mid-Year Budget Review (MYBR) and fiscal targets
- The Minister of Finance reiterated intention to continue adhering to the approved 2024 Budget, consistent with program objectives—achieving a primary surplus (on commitment basis) of 0.5 percent of GDP on the back of a 0.9 percent of GDP improvement in non-oil revenue collection.
- The MYBR implemented some limited spending reallocations and revenue adjustments.

- Text Table 1. The 2024 Mid-Year Budget Review (Percent of GDP)
  - Total Revenues: 16.8 / 16.9 / 16.8 / 17.1
  - Grants: 0.2 / 0.3 / 0.2 / 0.3
  - Oil Revenues: 1.4 / 1.5 / 1.4 / 1.7
  - Non-Oil Revenues: 15.1 / 15.1 / 15.1 / 15.2
  - Primary Expenditures: 16.2 / 16.4 / 16.3 / 16.7
  - Compensation of Employees: 6.1 / 6.2 / 6.0 / 6.0
  - Goods and Services: 1.1 / 1.1 / 1.1 / 1.1
  - Grants to Other Gov. Units: 4.2 / 4.2 / 4.2 / 4.2
  - Energy Sector Transfer: 1.7 / 1.6 / 1.8 / 2.2
  - Capital Expenditures: 2.7 / 3.2 / 2.7 / 3.0
  - Domestically financed: 1.7 / 2.3 / 1.7 / 1.7
  - Foreign financed: 1.0 / 0.9 / 1.0 / 1.3
  - Others: 0.5 / 0.1 / 0.4 / 0.1
  - Primary balance (commitment basis): 0.5 / 0.5 / 0.5 / 0.5
  - Memorandum items:
    - GDP (bn GHS): 105 / 110 / 120 / 1054 / 1054
    - Non-oil primary balance: -0.89 / -1.01 / -0.90 / -1.20
  - Highly-targeted social spending (GSFP, NHIS, LEAP, and Capitation Grant): 0.53 / 0.55 / 0.53 / 0.53

### Budget execution risks, offsets, and outlook for 2024 targets
- Emerging spending pressures compared with the second review:
  - Increased budgetary transfers to cover a higher energy sector shortfall: 0.6 percent of GDP (¶25).
  - Need to address effects of the dry spell in northern regions: 0.2 percent of GDP.
  - Higher-than-anticipated disbursements of concessional project loans: 0.2 percent of GDP.
- Offsetting factors preserving achievability of 2024 objectives:
  - Program expenditure was set higher than 2024 Budget spending ceilings and nominal GDP was revised up, creating a buffer: 0.7 percent of GDP.
  - Expenditure reallocation offsets cost of dry spell measures: 0.1 percent of GDP.
  - Greater-than-expected oil revenue: 0.1 percent of GDP.
  - Greater-than-expected non-oil revenue: 0.1 percent of GDP.

### Measures to enforce budget execution and revenue actions
- Ministry of Finance actions:
  - Repeated communication at cabinet level and publicly to MDAs to strictly adhere to budgetary allotments.
  - Reminder of sanctions for non-compliance by MDAs (PFM Act administrative and criminal sanctions; arts. 96–98).
- Revenue administration actions by GRA:
  - Strengthened audits on large taxpayers.
  - Continuous roll-out of the e-VAT system.
  - New controls on declaration of foreign source income of residents.

### 2025 Budget timing and transitory arrangements
- Submission to parliament of the 2025 Budget will be delayed to March 2025 due to upcoming elections (MEFP¶9).
- Government submitted an “Expenditure in Advance of Appropriation” Bill (prior action), a transitory budget covering Q1 2025.
- Expenditure ceilings under the transitory budget set conservatively to be consistent with program objective of achieving a primary surplus of 1.5 percent of GDP, with measures to permanently raise non-oil revenue by at least 0.6 percent of GDP on an annual basis.
- The 2025 Budget to be submitted to parliament by the new administration by end-March 2025 (new SB).
- Note: revenue measures underpinning the 2025 budget will only start to be implemented in Q2 2025; fiscal projections account for three-quarter of the expected full year yield of 0.6 percent of GDP.

### Strengthening social policies and outcomes
- Poverty outcome:
  - 29.5 percent of the population living in extreme poverty (US$2.15 per day) in 2023, up 3.1 percentage points from the previous year.
- Recent social program adjustments:
  - Since 2022, LEAP more than doubled and an indexation mechanism was introduced.
  - Strengthened Ghana School Feeding Program (GSFP) and National Health Insurance Scheme (NHIS) via increased allocations and partial arrears clearance.
- Planned 2025 actions (MEFP¶13–14):
  - Review and update LEAP registry with WB support; expand beneficiaries to 400,000 households by end-September 2025 (new SB).
  - Implement a 35-percent increase in GSFP budgetary allocation to increase caloric value of meals.
  - Increase NHIS budgetary resources to broaden coverage.
  - These policies will increase allocations monitored under the IT to 0.6 percent of GDP next year.
  - IT focus to shift to actual resources received by line ministries from the consolidated fund to avoid payment delays.
  - Authorities committed to clearing remaining stock of social benefit arrears by end-year (MEFP¶13).
- Medium-term social objectives (MEFP¶14):
  - Improve operational efficiencies (procurement, administrative costs, digitalization, audits).
  - Increase LEAP benefits to 20 percent of pre-transfer household consumption and expand coverage.
  - Increase GSFP meal benefit to cover 30 percent of children’s daily caloric need.
  - Reach universal health coverage by expanding NHIS beneficiaries and covered claims.

### Structural fiscal reforms: Fiscal framework and institutions
- New draft Fiscal Responsibility Act (FRA) submitted to parliament (end-October 2024 SB):
  - Establishes a long-term fiscal anchor: debt-to-GDP ratio of 45 percent of GDP by 2034.
  - Establishes an operational target: primary balance on commitment basis to ensure achievement of the debt anchor (MEFP¶36; Annex II).
  - Defines escape clauses, activation circumstances, and correction mechanisms.
  - Provides legal ground to reform the Fiscal Council to bolster independence in monitoring fiscal policy and fiscal rule implementation.

### Domestic revenue mobilization
- GRA administrative measures (MEFP¶38–39):
  - Strengthened VAT enforcement on residential accommodations.
  - Enhanced audits on large taxpayers of PIT, CIT, and VAT.
  - Rolled out e-VAT to large taxpayers to support 2024 revenue collection.
  - Finalizing cleansing of the taxpayer register (end-June 2024 SB) with final report to MoF within weeks.
  - Adopted data standardization and validation requirements for taxpayer data integrity.
  - Finalizing operationalization of Integrated Tax Administration System (ITAS) expected by end-December 2024 (SB).
- Medium-Term Revenue Strategy (MTRS) guidance:
  - MTRS aims to significantly increase tax revenue over 2024–27 via base broadening, minimizing tax avoidance, and ensuring progressive, equitable, transparent taxation.
  - Mid-implementation review of the MTRS planned in early 2026 (MEFP¶40) with Fund support.
  - Fiscal Regime Framework for Extractive Industries (FRFEI) now expected to be submitted to Parliament by end-July 2025 (MEFP¶37).

### Public Financial Management (PFM) reforms and procurement
- GIFMIS and related PFM measures (MEFP¶42–43):
  - Enabled “Blanket Purchase Agreement” (end-September 2024 SB) to capture multi-year commitments in GIFMIS.
  - Initiated compilation of public procurement data for 2021–23 with final report by end-December.
  - Legislative initiatives to merge four statutory funds with respective line ministries expected to be adopted by cabinet by end-June 2025 (SB).
  - Progress toward single treasury account slowed due to onboarding challenges for 549 MDAs and MMDAs accounts onto GIFMIS (end-March 2025 SB).
- Public procurement weaknesses and remedial measures (MEFP¶42):
  - Large share of procurements done outside GHANEPS with extensive recourse to single source and restricted tendering (40 percent of total value of procurements in 2020).
  - PPA finalizing 2021–23 public procurement report.
  - Integrate GHANEPS with GIFMIS to ensure only budgeted and allotted projects/purchase orders proceed to award contracts (end-December 2024 SB).
  - Target: increase share of procurements (by value) registered in GHANEPS to 90 percent of total procurements by 2025Q4.

### Energy sector: deterioration, fiscal impact, and reform package
- Recent deterioration and fiscal impact:
  - Energy sector shortfall likely about 0.6 percentage points of GDP larger than previously expected, bringing total shortfall to about 2.2 percent of GDP this year (¶26).
  - Drivers: exchange rate pressures, higher power generation costs due to increased reliance on costly liquid fuel, and lower ECG revenue collections.
  - CWM not properly implemented; accumulation of arrears to IPPs and fuel suppliers; PURC questioned ECG collections and uses.
- Agreed holistic approach building on Ghana’s Energy Sector Recovery Programme (ESRP, end-June 2023 SB):
  - Immediate actions (selected):
    - Increase electricity tariff by 3 percent on average as of October 1, 2024 to reflect exchange rate, CPI inflation, fuel prices, and generation mix.
    - Cease procurement of costly liquid fuel and switch to natural gas.
    - Launch revenue drive to increase ECG collection in 2024Q4 and ensure full implementation of the CWM (ECG to declare all tariff bills collected and payments made to Tier 1 and Tier 2 claimants under CWM).
    - Require ECG to secure formal approval from MoF and Ministry of Energy before new capital expenditures not included in 2022 Major Tariff Review.
    - Draft ToR in consultation with WB and Fund to prepare restructuring strategy to open ECG operations to private sector participation (prior action), including comprehensive technical and financial audit of ECG. Draft strategy expected completed by end-June 2025 and adopted by Cabinet by end-September 2025 (new proposed SB).
  - Medium-term measures (selected):
    - Finalize 2023 and 2024 energy sector legacy debt validation audits by March and August 2025, respectively.
    - PURC actions:
      - Continue quarterly tariff adjustments consistent with 2022–25 Electricity and Water Major Tariff Review and publish technical notes to justify tariff decisions (new proposed quarterly SB).
      - Review IMF/WB-supported methodology for quarterly adjustment of electricity tariffs by end-2024 to reduce discretion.
      - Implement a new major tariff review by end-September 2025 (new proposed SB).
      - Publish audited quarterly validation of ECG’s revenue and collection accounts reports and act on auditors’ findings, with next audit to be published by end-January 2025 with an unqualified opinion (new proposed SB).
      - Publish monthly CWM Validation reports confirming compliance with CWM Guidelines.

- Box 1 summary: energy sector risks and legacy arrears
  - At end-December 2023, estimated stock of arrears (“legacy debt”) of US$2.1 billion or 2.8 percent of GDP to IPPs and private fuel suppliers (included in DSA debt perimeter).
  - Energy sector shortfall arises from weak governance, system and revenue collection losses, high fixed costs, and tariffs below cost recovery.
  - Program aims include: preventing further arrears accumulation, ensuring timely MDA payments, renegotiating PPAs to reduce capacity charges, increasing gas consumption, adopting least-cost fuel procurement, improving payment mechanisms via national gas clearing house and imposing CWM.
  - Despite program efforts, staff expects shortfall to exceed programmed levels in 2024 by 0.6 percentage points of GDP, reflecting tariff decisions that did not fully reflect cedi exchange rate, inflation, fuel and generation costs; delayed ESRP implementation; greater reliance on costly liquid fuels; and governance issues resulting in improper CWM implementation.
  - ECG declared monthly revenue for CWM disbursements in first 7 months of 2024, except March, was below minimum level of GHS1 billion provided by Updated CWM Guidelines.

*Source: Ghanaian authorities and IMF staff projections as presented in the 2024 Mid-Year Budget Review and associated MEFP and staff notes.*

### 28. The authorities published the

### 28. The authorities published the Cocoa Board’s (Cocobod) turnaround strategy

### Cocoa sector and Cocobod turnaround
- Strategy objectives and measures:
  - Restore Cocobod’s financial sustainability by:
    - strengthening financial oversight;
    - maintaining the producer price within the range of 60-70 percent of international prices to balance the need for a fair distribution of export proceeds to farmers and for covering Cocobod’s financial and operational costs;
    - rationalizing costs—including staffing, industry, and financing costs—based on a functional review of Cocobod’s departments and subsidiaries;
    - phasing out quasi-fiscal activities entailed by the financing of cocoa roads and fertilizer programs.
  - A cocoa desk established at the MoF continues to review Cocobod’s financial position to improve financial oversight.
  - The authorities have requested Fund TA to develop an effective SOE oversight strategy.

- 2023–2024 developments and financing model:
  - Cocobod’s financial position improved in 2023, but the current financial year is proving challenging.
  - Weak cocoa production in FY2023/24 limited Cocobod’s ability to deliver on existing forward sales contracts, forcing rollovers to the 2024/25 season despite record-high spot market prices.
  - The 2024/25 farmgate price was increased by 50 percent, reflecting high international prices and the need to reduce incentives to smuggle cocoa and/or use cocoa farmland for illegal gold mining.
  - Cocobod adopted a new financing model to purchase cocoa beans, replacing the annual international banks’ loan syndication with a combination of self-financing by licensed buying companies and local bank financing.
  - Cocobod’s cash flow situation is expected to remain broadly balanced during the current season assuming a rebound in production due to a normalization of weather conditions.

### Debt restructuring and debt management
- Progress on restructuring:
  - Domestic debt restructuring was completed in 2023.
  - Following an MoU with the Official Creditor Committee (OCC) reached in June 2024, all but four countries have signed the MoU, with the remaining signatures expected in the coming weeks.
  - OCC co-chairs are preparing bilateral agreements to guide implementation; all bilateral agreements are expected to be signed by June 2025.
  - An agreement-in-principle with two bondholders committees was reached in June 2024; authorities recently completed the Eurobond exchange.
  - Authorities have sent letters to their largest other commercial creditors to request initiation of technical discussions on restructuring and intend to start negotiations with smaller commercial creditors through a coordination mechanism.

- Pre-cut-off-date (CoD) loan disbursements and prioritization:
  - MoF strategy to prioritize disbursements of pre-CoD loans (end-August CoD) is based on socio-economic return, project readiness, and expected pace of disbursements.
  - The strategy was presented to the OCC in September 2024.
  - Actual disbursements of pre-CoD projects reached US$111 million at end-June 2024, below the US$250 million ceiling under the program.

- Domestic market re-access and debt management capacity:
  - Government financing has relied heavily on T-bills; authorities intend to re-access the domestic bond market next year.
  - The government has been issuing large amounts of T-bills over the last two years, relying on demand from non-bank investors.
  - Authorities intend to gradually resume domestic bond issuances in 2025 with a first issuance of a 2-year bond planned in the second quarter.
  - A revised medium-term debt management strategy will be published by June 2025, alongside an annual borrowing plan and quarterly issuance calendars.
  - The Debt Management Office has requested IMF TA to support capacity building in liability management operations and debt sustainability analysis.
  - Upgrade of securities operation infrastructure system (CS-DRMS) will be completed by end-December 2024 to improve debt recording, processing of debt service, reporting of public debt, and monitoring of borrowing and contingent liabilities stemming from SOEs and collateralized debt issuance.
  - Authorities intend to establish an investment relations unit to engage with investors and credit rating agencies.

### Monetary policy and exchange rate framework
- Monetary stance and inflation:
  - The Bank of Ghana (BoG) reduced its policy rate by 300 basis points this year.
  - The real policy rate is at some 5-7 percent, still above its historical average.
  - BoG signaled intention to maintain a tight policy stance to bring inflation down to its target band (8±2 percent) by the end of next year.
  - Rapid growth in broad money points to possible need for additional liquidity-absorption efforts.
  - Substitution of open market operations (OMOs) with the cash reserve ratio (CRR) has shifted the cost of monetary policy to the financial sector and continues to reduce the attractiveness of cedi deposits; BoG will review these policies to ensure objectives are met without undue costs or excessive risk taking.

- FX market reforms and interventions:
  - In September 2024, BoG adopted a more robust FX reference rate computation method to converge with the benchmark rate derived from the wholesale FX market (end-August 2024 SB).
  - Adoption of the new reference rate is the first step to align Market Reference Rate (MMR) methodology with IOSCO Principles of Financial Benchmarks.
  - Despite increased FX interventions, the authorities have maintained exchange rate flexibility and continued to rebuild FX buffers; interventions have been conducted while achieving NIR targets.
  - Launch of 7-day FX forward sale auctions with a multiple-price allotment is an important step; key milestones include developing a comprehensive FX intervention policy and replacing bilateral adjudications with a transparent auction-based FX auction mechanism where allocations are based solely on price.

- Multiple currency practices (MCPs) and capital flow measures:
  - Ghana maintains some official actions resulting in MCPs arising from:
    - use of the previous day's BoG reference rates and applying fees for BoG direct FX transactions with the government;
    - use of the previous day’s BoG buying reference rate and applying fees for surrender to the BoG of FX funds related to cocoa exports;
    - BoG requirement to use the opening Bloomberg regional bid rate for banks' purchases of FX inward remittances.
  - The most recent day when impermissible spreads arose for existing MCPs is September 9, 2024 (government), September 12, 2024 (cocoa), and September 12, 2024 (remittances).
  - Staff recommends gradual removal of certain CFMs once reserve levels are adequate, consistent with the Fund’s Institutional View. Certain CFMs remain in place, including a US$10,000 withdrawal limit per trip and per annual undocumented transfer, and surrender requirements for cocoa proceeds and gold to the BoG.

### BoG safeguards, balance sheet, and governance reforms
- Safeguards assessment and legal amendments:
  - Progress toward implementing the 2023 safeguards assessment’s recommendations has been slow.
  - In June, Cabinet approved draft amendments to the BoG Act in consultation with the Fund; amendments will be submitted to Parliament by end-May 2025 (proposed new SB).
  - BoG Board discussed a risk assessment of the Gold-for-Oil program (G4O) and approved an exit strategy envisaging an outright government takeover of BoG’s legal and financial exposure; BoG is working with the government to exit the G4O by end-September 2025.

- Strengthening BoG’s balance sheet:
  - MoF and BoG are working on an MoU to plan for gradual recapitalization of the central bank to help it recover from the impact of the domestic debt restructuring, while respecting fiscal commitments and debt targets under the program.
  - Recapitalization options include budgetary or asset transfers, suspension of profit transfers, and/or use of buffers generated in program implementation.
  - To strengthen recovery of net equity, in early 2025 BoG will launch an external efficiency review and adopt a strategy to streamline operational costs.

### Financial sector stability, state-owned banks, and AML/CFT
- Banking sector recapitalization and supervision:
  - Financial sector stability has been maintained following the domestic debt exchange; most banks are on track with or will exceed the minimum two-thirds recapitalization by end-2024 (SB).
  - Pending parliamentary approval, implementation of the WB-funded window of the GFSF will support eligible banks to comply fully with capital adequacy requirements (without reliefs) within program timelines.
  - BoG requires banks with NPL ratios exceeding 10 percent to submit credit action plans and will closely monitor their performance.
  - BoG is developing strategies to address structural obstacles to problem credit recovery and is reviewing and updating prudential credit and operational risk standards.
  - Risks remain elevated due to rise in NPLs and weaknesses and undercapitalization of most specialized deposit-taking institutions (SDIs).

- Credit expansion initiatives and risks:
  - Tiered CRR adopted in 2024Q1 is targeted to motivate credit expansion, but a few entities in higher reserve categories benefit from forbearance, potentially creating moral hazard and arbitrage risks; BoG committed to eliminating this forbearance by end-June 2025.
  - BoG approved a “regulatory sandbox” for a micro-credit lending program via a fintech platform; BoG’s updated credit and operational risk standards will encompass this credit segment.

- National Investment Bank (NIB) recapitalization and state-owned banks:
  - MoF injected capital of GHS800 million in cash between June and October 2024 into NIB, aiming to reach total capital injections of GHS1.85 billion (in cash and recapitalization bonds) to bring NIB’s CAR to a non-negative position by end-2024 (SB).
  - BoG intensified enhanced supervision and additional reporting for NIB.
  - With Fund assistance, BoG finalized ToR for the NIB special investigation and is recruiting an international firm to complete the exercise by end-2024; this will inform an overarching restructuring plan by end-March 2025 (SB).
  - Lifting of Prompt Corrective Actions (PCAs) will be subject to assessment that required key reforms identified by the special investigation have been satisfactorily implemented.
  - The government will conduct a diagnostic review of state-owned banks (excluding NIB) covering business models, governance, risk management, and legal framework, and devise a reform strategy by end-April 2025 (SB).
  - BoG will launch a special review of ADB’s operations to inform a restructuring strategy by end-May 2025; BoG has announced intention to divest its share ownership in ADB.

- AML/CFT framework enhancements:
  - Financial Intelligence Center to complete National Risk Assessment exercise by end-2024, an important input for the third GIABA mutual evaluation beginning in 2025.
  - Office of the Registrar of Companies (ORC), with WB support, is rolling out a new registrar system integrated with other administrative frameworks to enhance beneficial ownership (BO) transparency; ORC committed to enforce sanctions for companies not maintaining up-to-date information.
  - Authorities stepped up sensitization and capacity building for Designated Non-Financial Businesses and Professions in priority sectors such as real estate, casinos, and dealers in precious metals and stones.
  - Supervisory authorities responsible for AML/CFT of financial institutions are significantly under-resourced relative to the number of institutions they must supervise, making resource strengthening a priority.

*Source: Excerpt from 1ghaea2024004-print-pdf — IMF staff report chapter text provided.*

### 46. The authorities are taking steps to  enhance governance and address vulnerabilities

### 46. The authorities are taking steps to enhance governance and address vulnerabilities

### Governance, transparency, and anti-corruption measures
- Several measures under the Fund-supported program aim to strengthen the integrity and efficiency of public procurement and revenue administration processes and enhance transparency and accountability (MEFP¶50).
- The authorities are reviewing the first draft of the IMF Governance and Corruption Diagnostic Assessment TA report; some recommendations will be taken forward under the Fund-supported program.
- Reform of the public officers’ asset declaration system:
  - A new bill, prepared in consultation with IMF staff and in line with international best practices, is to be submitted to parliament by end-September 2025 (new SB).
- Audit transparency:
  - The follow up report of the Auditor General’s audit on COVID-19 spending has not yet been published; the authorities are committed to publishing it by end-2024 (MEFP¶50).

### Government strategy for inclusive, private sector–led growth
- Strategy focus: boosting export competitiveness and improving access to finance (MEFP¶52).
- Key objectives and actions:
  - Simplifying regulations and improving the business environment, including digitalization of new business registrations and establishment of a construction permitting portal (with WB support).
  - Attracting FDI via amendments to the Investment Promotion Centre Act to reduce minimum capital requirements and introduction of an e-visa system.
  - Boosting export competitiveness through reduction in trade barriers and implementation of the AfCFTA agreement, upskilling the workforce, streamlining industrial policies, improving access to finance, and promoting digitalization through expanded broadband and digital skills training.

### Program financing and modalities
- Adequacy of financing:
  - Program is fully financed, with firm financing commitments in place for the next 12 months and good prospects for adequate financing for the remainder of the program (Text Table 2).
  - While the second WB DPF is delayed to 2025, higher-than-expected WB project disbursements (about US$520 million total) and a better current account have lowered the residual BoP financing gap in 2024.
  - Additional dry-spell-related WB support will bring the total 2024 budget support to US$390 million and an estimated US$728 million in 2025. This reflects two potential DPF disbursements, assuming the authorities implement all underlying reforms in a timely manner.
  - No further budget support is expected from the African Development Bank (AfDB) after 2024.
- Political engagement:
  - Given approaching elections and Fund policy, staff engaged leaders of the main opposition party; Representatives of the National Democratic Congress provided adequate assurances regarding reform continuity and support of the program’s main objectives and key policies.

### Debt restructuring, program conditionality, and financing table
- Debt restructuring and LIOA:
  - Ongoing progress toward signature of the MoU between the government and the OCC and preparation of bilateral agreements satisfy the Fund’s Lending into Official Arrears (LIOA) policy.
  - Arrears to other official bilateral creditors are deemed away in application of the LIOA policy (Strand 1).
  - Following the Eurobonds restructuring and consistent with the LIOA policy, the authorities are making good faith efforts to reach a debt restructuring agreement with other external commercial creditors on comparable terms and within program parameters.
- Proposed modifications to program conditionality (MEFP Tables 1-2):
  - Modification of PCs and ITs for end-December through end-June 2025: primary balance PC and non-oil revenue IT will be modified while maintaining fiscal effort relative to GDP; NIR targets for end-March and end-June 2025 will be lowered; MPCC bands through June 2025 will be shifted upwards; IT on social spending will be monitored on actual disbursements to line ministries.
  - New non-oil revenue adjustor: an asymmetric adjustor for the IT on non-oil revenues (ceiling) to reflect potential impact of a one-off dividend from ESLA at end-December 2024.
  - New conditionality through 2025: PCs and ITs until end-December 2025 will be established along with 9 new SBs for end-January 2025 through end-December 2025, focused on macro-critical reforms.

- Text Table 2. Proposed Program Financing (USD million)
  - 2023 2024 2025 2026 Total
  - Pre-restructuring Financing Gap
    1
    3,3643,8534,3992,24313,860
  - Debt service relief from restructuring
    2
    2,6772,1002,9511,5099,237
  - Official creditors
    3
    8367666576042,863
  - Commercial creditors
    4
    1,8411,3342,2949056,374
  - Post-restructuring financing gap6871,7541,4487344,623
  - IMF6001,3207203603,000
  - World Bank
    5
    273907283741,519
  - African Development Bank604400104

  - Notes in table (verbatim as in source):
    - 1 Pre-restructuring financing gap before external debt treatment from bilateral and commercial creditors (and net of arrears bond debt service).
    - 5 Beyond the IDA20 period, IDA financing figures are based on assumptions; actuals will depend on IDA replenishment volumes, country performance, and other operational factors. Delivery of DPFs will be dependent on an agreement with the government on a strong program of policy and institutional reforms, and adequacy of the macroeconomic policy framework. In addition, the World Bank is planning to disburse $1.85 billion for project loans during 2023-26, already included in the baseline.
    - 2 Actual debt service arrears accumulated in 2023
    - 3 Based on June 2024 MoU between Ghana and G20 Common Framework OCC
    - 4 Based on October 2024 Eurobond restructuring and the authorities' restructuring strategy for other commercial cr

### Enterprise risks, capacity to repay, and mitigation
- Enterprise risks associated with Ghana’s ECF-supported arrangement are high but mitigated by strong program design, authorities’ commitment, and financing assurances.
- Capacity to repay (CtR):
  - CtR to the Fund is adequate but subject to significant downside risks; assessment assumes successful program and debt restructuring implementation predicated on achieving moderate risk of debt distress and restoring adequate market access.
  - Stock of debt to the Fund as a share of GDP (based on the existing and prospective drawings) peaks in 2025 at 5.1 percent of GDP.
  - Debt service obligations to the Fund will reach a peak of 10.8 percent of total debt service in 2030.
  - SDR holdings: SDR 46.5 million at end-July 2024 compared to SDR 634.3 million at end-July 2022.
  - Downside risks to CtR stem from high uncertainties surrounding the outcome of the 2024 general elections and delays in implementing policies and reforms under the Fund-supported program.
- Risk mitigation:
  - Ghana’s strong track record of debt service to the Fund, authorities’ strong commitment and ownership of the program, and financing assurances from creditors and development partners.
  - Political assurances collected in the review mitigate election-related risks.
  - Continued Fund support is deemed important to avoid reputational risks and preserve partner support for debt restructuring finalization.

### Staff appraisal: macroeconomic progress and fragilities
- Progress and outcomes:
  - Ghana’s economy has made further progress towards stabilization; performance under the ECF-supported program generally satisfactory despite some delays on the structural front.
  - Completion of the Eurobonds restructuring is a key milestone toward restoring debt sustainability.
  - With adjustment policies and ongoing reforms broadly on track, the fiscal position and the external sector have continued to improve.
  - Real GDP growth has rebounded more rapidly than initially envisaged, while inflation has further declined.
- Fragilities and risks:
  - Fully and durably restoring macroeconomic stability while addressing longstanding vulnerabilities requires steadfast program implementation.
  - Elevated risks: global factors (dry spell, commodity price volatility, external demand, trade disruptions) and possible election-related policy and reform slippages.
  - Gains under the program remain fragile; persistence in the reform effort is essential.
  - Diligent program implementation before and after the upcoming elections is paramount.

### Policy recommendations and priorities (programmatic)
- Fiscal policy and social protection:
  - Stay the course of fiscal policy adjustment while protecting the vulnerable.
  - Enhance domestic revenue mobilization and streamline primary expenditures to reduce the fiscal deficit and financing needs.
  - Exercise strict control over government spending and be ready to adopt contingency revenue and expenditure measures if needed.
  - Enhance social protection interventions to foster an inclusive recovery.
  - Continue efforts to reach agreement with other commercial creditors on debt treatment consistent with program parameters.
- Energy sector:
  - Promptly and forcefully address energy sector challenges through the authorities’ holistic approach, including immediate and medium-term actions to reduce energy shortfall by:
    - Reducing system and collection losses.
    - Ensuring tariff decisions are rule-based, reflect timely developments in the cost of energy, and are implemented while protecting the most vulnerable consumers.
  - Improve transparency and strengthen governance and accountability in the sector.
- Fiscal structural reforms and public financial management:
  - Enact proposed amendments to strengthen Ghana’s fiscal responsibility framework in line with best practices in a timely manner to instill confidence in restoring debt sustainability and strengthening fiscal accountability and transparency.
  - Redouble efforts to implement comprehensive reforms to improve revenue administration consistent with priorities identified under Ghana’s MTRS.
  - Enhance public financial management by strengthening expenditure controls and public investment management, streamlining statutory funds, preventing arrears accumulation, and strengthening governance and transparency in public procurement.
  - In the cocoa sector, ensure steadfast implementation of the recently approved Cocobod turnaround strategy.
- Monetary policy, reserves, and FX framework:
  - BoG should maintain a tight monetary policy stance given upside risks to inflation, supported by robust liquidity absorption operations to prevent de-anchoring of inflation expectations and aim for inflation to gradually return within the BoG target band.
  - Continue progress on Fund safeguard assessment recommendations to strengthen central bank independence and operational efficiency.
  - Rebuild international reserves and accelerate reforms to enhance BoG’s FX intervention framework:
    - Manage portfolio risks and liquidity implications of the gold for reserves program.
    - Limit FX interventions to rebuild external buffers.
    - Implement a formal internal FX intervention policy framework.
    - Replace bilateral adjudications with transparent auction-based FX auctions—complying with MCPs policy requirements.
    - Maintain the more robust FX reference rate computation method to limit occurrence of MCPs.
- Financial sector stability and supervision:
  - Intensify monitoring, escalate measures to promote timely bank recapitalization, and phase out regulatory forbearances.
  - Given high NPLs, implement robust supervisory strategies to bolster credit and operational risk management; ensure prompt and adequate recognition, reporting, and provisioning of NPLs along with effective NPL recovery.
  - Ensure timely execution of the strategy to address NIB’s financial and operational problems and implement the GFSF’s system of key performance indicators to reinforce PCAs and prudential requirements.
  - BoG’s intention to divest its share ownership in ADB is welcome; timely action is warranted to limit risks and conflicts of interest.
  - Address legacy problems at SDIs and NBFIs in a cost-effective way based on objective viability assessments, transparent burden-sharing mechanisms, and safeguards to mitigate risks to financial system stability.
  - Develop and implement strategies to strengthen financial sector safety nets—including enhancing the Ghana Deposit Protection Corporation—and investor awareness to minimize risk of future government bailouts.

*Source: IMF staff report excerpts*

### 61. Given Ghana’s generally satisfactory performance, the commitments under the

### 61. Given Ghana’s generally satisfactory performance, the commitments under the program, and the progress made in the comprehensive debt restructuring, staff supports the completion of the third review under the ECF arrangement, the financing assurances review related to private sector creditors, and the request for modification of performance criteria.

### Fiscal outlook and budgetary operations (commitment basis and GHS millions)
- Revenue and grants: 15.7, 16.0, 16.0, 16.9, 17.1, 17.4, 17.2, 18.1, 18.1, 18.0, 18.0 (percent of GDP) for 2022–2029 sequence shown.
- Taxes: 13.1, 13.5, 13.5, 14.5, 14.6, 14.9, 14.7, 15.6, 15.6, 15.6, 15.6 (percent of GDP).
- Interest (percent of GDP): 7.4, 3.2, 3.2, 5.2, 4.0, 5.2, 4.2, 3.4, 3.2, 3.3, 3.5.
- Overall balance (commitment basis, percent of GDP): -11.8, -3.6, -3.6, -4.7, -3.5, -3.7, -2.7, -1.9, -1.7, -1.8, -2.2.
- Overall balance (cash basis, percent of GDP): -10.6, -3.1, -3.1, -6.1, -4.6, -4.7, -3.7, -2.9, -2.6, -2.6, -2.2.
- Primary balance (commitment basis, percent of GDP): -4.3, -0.3, -0.3, 0.5, 0.5, 1.5, 1.5, 1.5, 1.5, 1.3.
- Public sector debt (percent of GDP): 92.7, 82.9, 83.1, 82.5, 78.0, 79.5, 72.2, 67.2, 63.0, 59.4, 56.8.
- Selected GHS million figures (2022 actual; 2nd ECF review actual; 2023–2029 projections):
  - Revenue and grants: 96,651; 134,672; 134,672; 172,549; 180,545; 205,588; 208,772; 248,860; 281,219; 317,705; 359,071.
  - Taxes: 80,622; 113,972; 113,972; 147,569; 153,500; 175,895; 178,243; 214,543; 242,696; 274,757; 310,531.
  - Interest expense: 45,687; 27,055; 27,055; 53,264; 41,902; 61,948; 50,561; 46,870; 50,481; 58,129; 69,269.
  - Overall balance (commitment basis, GHS millions): -72,245; -29,879; -29,884; -48,163; -37,097; -44,197; -32,310; -26,232; -27,127; -31,713; -44,389.
  - Public sector debt (GHS millions): 569,534; 698,021; 699,718; 841,799; 822,134; 940,972; 878,651; 923,930; 980,473; 1,046,243; 1,130,839.
  - Nominal GDP (GHS, million): 614,336; 841,633; 841,633; 1,020,180; 1,053,875; 1,183,394; 1,216,674; 1,375,843; 1,556,936; 1,761,114; 1,990,418.

### Public sector financing needs and sources (GHS billions)
- Gross financing needs (I): 133.1, 84.3, 84.3, 142.6, 121.7, 174.2, 132.7, 155.2, 174.0, 201.3, 199.9.
- Gross financing sources (II): 133.1, 76.7, 76.7, 99.0, 96.3, 115.5, 109.0, 142.8, 174.0, 201.3, 199.9.
- Financing gap (I)-(II): 0.0, 7.6, 7.6, 43.7, 25.4, 58.7, 23.6, 12.4, 0.0, 0.0, 0.0.
- Debt service (GHS billions): 113.5, 82.1, 82.1, 121.0, 102.3, 184.7, 141.9, 165.1, 185.9, 215.6, 224.8.
  - External debt service: 22.1, 5.7, 5.7, 33.2, 16.2, 61.0, 25.4, 40.3, 46.9, 52.1, 58.7.
  - Domestic debt service: 91.4, 76.4, 76.4, 87.8, 86.1, 123.7, 116.5, 124.8, 139.1, 163.4, 166.0.
- External financing composition (GHS billions): External total 25.8, 9.4, 9.4, 6.6, 10.4, 11.5, 12.0, 23.0, 44.2, 46.2, 50.4.
  - Multilateral: 5.4, 7.2, 7.2, 2.0, 7.8, 6.3, 6.6, 6.5, 12.7, 14.0, 15.4.
  - Private sector: 18.3, 0.1, 0.1, 0.0, 0.0, 0.0, 0.0, 9.4, 27.8, 28.2, 30.5.
  - Domestic: 105.9, 69.5, 69.5, 93.9, 87.5, 105.7, 98.7, 121.5, 131.7, 157.3, 152.1.
- Exceptional financing and IMF role:
  - Exceptional financing listed as 0.0 for several projected years; IMF exceptional financing entries include 0.0, 6.6, 6.6, 17.9, 19.1, 11.2, 11.8, 6.1, 0.0, 0.0, 0.0 (GHS billions) in the table labeled exceptional financing row.

### Monetary and financial indicators (levels and growth)
- M3 (money and quasi-money, GHS millions): 180,267; 250,020; 250,019; 293,443; 321,937; 343,023; 377,487; 426,871; 483,057; 546,406; 617,550.
- Broad money (M2, GHS millions): 135,142; 185,426; 185,426; 217,631; 241,054; 254,402; 284,110; 321,278; 363,566; 411,245; 464,790.
- Net foreign assets (monetary survey, GHS millions): -10,321; 21,038; 21,711; 62,865; 59,099; 102,250; 90,218; 111,358; 147,902; 193,031; 247,901.
- Credit to private sector (GHS millions): 63,753; 70,559; 70,559; 86,072; 86,082; 97,261; 101,963; 119,380; 139,869; 163,806; 191,686.
- Base money (GHS millions): 68,104; 87,988; 88,299; 94,622; 115,251; 106,001; 128,805; 137,415; 153,456; 173,506; 198,117.
- Memorandum velocity and ratios (annual percent change unless otherwise indicated):
  - Base money growth: 57.5, 29.2, 29.7, 7.5, 30.5, 12.0, 11.8, 6.7, 11.7, 13.1, 14.2.
  - M2 growth: 27.8, 37.2, 37.2, 17.4, 30.0, 16.9, 17.9, 13.1, 13.2, 13.1, 13.0.
  - Credit to private sector growth (percent): 31.8, 10.7, 10.7, 10.7, 22.0, 22.0, 13.0, 18.4, 17.1, 17.2, 17.1.
  - M2 velocity: 4.5, 4.5, 4.5, 4.7, 4.4, 4.7, 4.3, 4.3, 4.3, 4.3, 4.3.

### Balance of payments and external sector (U.S. dollars, millions)
- Current account (millions USD): -1,695; -1,097; -1,045; -1,865; 760; -1,502; 281; 2,148; -414; -562 (sequence as in table).
- Trade balance (millions USD): 2,699; 1,691; 1,707; 2,144; 3,114; 3,092; 3,208; 3,930; 4,521; 4,945; 5,368.
- Exports f.o.b. (millions USD): 17,320; 15,702; 15,716; 16,541; 18,158; 18,121; 18,721; 20,274; 21,558; 22,624; 23,864.
- Imports f.o.b. (millions USD): -14,621; -14,010; -14,009; -14,397; -15,044; -15,029; -15,513; -16,344; -17,037; -17,680; -18,496.
- Financial account (millions USD): -2,402; -35; -43; -490; -1,349; -715; -155; 178; 1,776; 2,271; 2,668.
- Foreign direct investment (net, millions USD): 1,473; 1,308; 1,308; 1,558; 1,564; 1,725; 1,910; 2,263; 2,520; 2,795; 2,995.
- Financing gap (additional to bring reserves to at least 3 months by 2026): 0; 3,364; 3,364; 3,098; 1,754; 3,647; 1,448; 734; 0; 0; 0 (millions USD).
- Gross international reserves (program, millions USD, if financing gap is closed): 1,454; 3,661; 3,661; 5,116; 5,381; 6,851; 6,905; 7,789; 9,323; 11,072; 13,058.
- Months of imports of prospective goods and services (if gap closed): 0.7; 1.7; 1.7; 1.6; 2.2; 2.3; 2.8; 2.8; 3.0; 3.4; 3.9; 4.4.

### External financing needs and sources (US$ millions)
- Total needs (I): -243; 3,936; 3,774; 4,550; 1,879; 5,546; 2,339; 2,757; 3,922; 4,464; 4,929 (annual sequence).
- Total sources (II): -243; 572; 410; 1,452; 125; 1,899; 891; 2,023; 3,922; 4,464; 4,929.
- Financing gap (I-II, US$ millions): 0.0; 3,364; 3,364; 3,098; 1,754; 3,647; 1,448; 734; 0.0; 0.0; 0.0.
- Expected sources of financing (selected, US$ millions):
  - IMF: ...; 600; 600; 1,320; 1,320; 720; 720; 360; 0; 0; 0.
  - World Bank: ...; 272; 767; 939; 0; 428; 728; 837; 400; 0; 0.
  - AFDB: ...; 60; 60; 44; 44; 40; 0; 0; 0; 0; 0.
  - Arrears to commercial external creditors: ...; 1,841; 1,841; 0; 0; 0; 0; 0; 0; 0; 0.
  - Arrears to official bilateral creditors: ...; 836; 836; 0; 0; 0; 0; 0; 0; 0; 0.

### Financial soundness and banking sector indicators (percent, end of period)
- Regulatory capital to risk-weighted assets: 17.8; 17.8; 15.6; 21.9; 20.9; 19.8; 19.6; 16.6; 13.9; 14.3 (selected end-period values).
- Nonperforming loans to total gross loans: 14.7; 17.3; 21.6; 18.2; 13.9; 14.8; 15.1; 14.8; 20.6; 24.1.
- Provisions to nonperforming loans: 69.3; 72.5; 77.7; 71.5; 82.2; 84.3; 83.2; 87.9; 73.2; 75.7.
- Return on assets (after tax): 4.5; 3.8; 3.7; 3.5; 4.0; 4.3; 4.6; 3.2; 5.4; 5.4.
- Liquid asset to total assets: 48.4; 53.7; 56.0; 58.6; 59.3; 63.0; 64.7; 61.7; 65.7; 67.5.

### Indicators of capacity to repay the Fund and Fund access/phasing
- Outstanding Fund credit (SDRs, millions): 1,286; 1,644; 2,514; 2,851; 2,878; 2,664; 2,431; 2,135; 1,746; 1,325; 849; 473; 160; 27; 0 (2022–2036 sequence).
- Total Fund obligations based on existing and prospective credit (millions of SDRs): 20; 24; 161; 234; 275; 250; 269; 332; 425; 458; 511; 412; 349; 170; 63 (2022–2036).
- Total obligations in millions of US$: 26; 32; 214; 314; 370; 337; 362; 449; 579; 623; 659; 598; 441; 237; 94.
- Outstanding Fund credit in percent of gross international reserves (program): 117.5; 59.9; 62.2; 55.4; 49.7; 38.5; 29.6; 22.1; 16.2; 11.5; 7.3; 3.8; 1.4; 0.2; 0.0.
- Access and phasing under the ECF arrangement (SDRs / US$ / percent of quota):
  - May 17, 2023 Board approval of the Extended Credit Facility: 451.4 SDRs / 600 US$ / 61 percent of quota.
  - November 1, 2023 completion of first review: 451.4 SDRs / 600 US$ / 61 percent of quota.
  - May 1, 2024 completion of second review: 269.1 SDRs / 360 US$ / 36 percent of quota.
  - November 1, 2024 completion of third review: 269.1 SDRs / 360 US$ / 36 percent of quota.
  - May 1, 2025 completion of fourth review: 267.5 SDRs / 360 US$ / 36 percent of quota.
  - October 31, 2025 completion of fifth review: 267.5 SDRs / 360 US$ / 36 percent of quota.
  - April 16, 2026 completion of sixth review: 265.9 SDRs / 360 US$ / 36 percent of quota.
  - Total: 2,241.9 SDRs / 3,000 US$ / 304 percent of quota. Ghana's quota: 738.

*Source: Ghanaian authorities; and IMF staff estimates and projections (extracted tables and text from the provided content).*

### Annex I. External Sector Assessment

### Annex I. External Sector Assessment

### Overall assessment
- Ghana’s 2023 external position was moderately stronger than the level implied by fundamentals and desirable policies.
- Drivers of the improvement in 2023: fiscal consolidation, strong gold exports, deferred external interest payments, and high remittances; the current account (CA) narrowed noticeably.
- Strong reserve accumulation through the gold-for-reserves program led to a faster-than-expected increase in gross international reserves.
- For 2024, strong gold export growth is expected to outweigh a sharp drop in cocoa exports, leading to a further improvement in the CA.

### Potential policy responses
- Finalization of the debt restructuring and continued implementation of the Fund-supported program to entrench debt sustainability and support an external position in line with fundamentals and desirable policies over the medium term.
- Continued fiscal prudence coupled with structural reforms to diversify the economy and improve the business environment to bolster external competitiveness and shift financing of capital investment from debt to FDI.

### Foreign assets and liabilities: position and trajectory
- Gross international reserves: recovered from US$1.5 billion in 2022 to US$3.6 billion in 2023 (1.6 percent of prospective imports) due to a very large gold purchasing program by the BoG (“gold-for-reserves”).
- External debt: remained high at 50 percent of GDP (end-2023 reference).
- FDI: declined from US$1.5 to US$1.3 billion (period referenced across recent years).
- Reported NIIP: partial data suggest an increase from US$-29 billion in 2018 to US$-24 billion as of end-2022.
- Developments in 2024: large gold purchases continued throughout H1 2024, and FDI has showed signs of recovery, promoting a further increase in reserves.
- Assessment and risks:
  - Risks to external sustainability remain despite improvements, given still low gross international reserves, vulnerability to natural disasters and food price shocks, and high external debt even post restructuring (projected at 51 percent of GDP at end-2024).
  - Policy actions recommended: limited foreign exchange interventions, continued fiscal consolidation, and shifting financing away from debt towards FDI to contain external debt growth and rebuild reserves.

### Current account
- Historical average 2018-22 CA deficit: 2.6 percent of GDP, declining by 0.7 percent of GDP over that period due to growing gold and crude oil exports and increasing remittances.
- CA movement: narrowed from 2.3 percent of GDP in 2022 to 1.4 percent in 2023 due to a sharp reduction in primary income outflows, lower imports, and a strong increase in remittances.
- Cocoa exports: declined from a peak of US$2.8 billion in 2021 to around US$1.5 billion in 2024 (US$2.2 billion in 2023) despite high world cocoa prices; causes include climate shocks, crop disease and smuggling.
- Gold exports: increased from US$5.1 to US$6.6 billion over the same period and are expected to increase by another US$2 billion in 2024.
- Gold prices: expected average increase of about 21 percent, to about US$2340 per ounce in 2024.
- Terms of trade: improved in 2023 after two years of decline.
- Model-based assessment:
  - Cyclically-adjusted current account balance: -1.6 percent of GDP.
  - Adjusted norm based on fundamentals and desirable policies: -3.3 percent of GDP.
  - Positive current account gap in 2023: 1.6 percent of GDP.
  - A 1 percent of GDP policy gap reflects strong gross international reserves (GIR) growth.

### Real exchange rate (REER)
- Nominal exchange rate: stabilized in 2023 after extreme nominal volatility in 2022 (depreciating on average 45 percent against the US$) and high inflation (32 percent on average).
- Real effective exchange rate: depreciated by 4 percent in 2022 and was flat in 2023.
- 2024 volatility: nominal rate depreciated by 25 percent against the US$ by end-July 2024; REER depreciated by 7.8 percent by end-June 2024.
- Assessment:
  - CA model suggests an undervaluation of the REER of 6.9 percent (using an elasticity of the current account to the REER of -0.24).
  - REER model estimates an undervaluation of 46.7 percent.
  - Bottom-line external sector assessment is based on the CA model, given its better fit.

### Capital and financial accounts: flows and policy measures
- Capital and financial account movements:
  - 2021: surplus of 3.4 percent of GDP.
  - 2022: deficit of 3.2 percent of GDP due to a collapse in FDI and large capital outflows (particularly by non-residents).
  - Portfolio investment: net outflow of 2.8 percent of GDP in 2022 versus net inflow of 2.6 percent of GDP in 2021.
- 2023 dynamics: start of debt restructuring negotiations in December 2022 and IMF-supported program approval in May 2023 slowed capital flight; BoG unwound large parts of collateralized assets (positive portfolio investment inflows), leading to a stronger financial account despite a decline in FDI.
- Medium-term forecast: over the coming 5 years, the capital and financial account is expected to gradually improve, with FDI forecast to increase to 3 percent of GDP by 2028 following completion of debt restructuring and gradual reform implementation; portfolio inflows expected to remain subdued with gradual recovery in international market access.
- Assessment and policy recommendations:
  - Risks: further tightening of global financial conditions and/or failure to implement the reform program could undermine the financial account.
  - Existing CFMs: a capital flow management measure (CFM)—US$10,000 withdrawal limit per trip and per annual undocumented transfer—has remained in place since 2014; surrender requirements for cocoa proceeds and gold to the BoG persist.
  - Staff recommendation: gradual removal of these CFMs once reserve levels are adequate, consistent with the Fund’s Institutional View.
  - Complementary policies: growth-friendly fiscal consolidation, tighter monetary policy, and structural reforms to enhance the business environment, strengthen governance and private sector competitiveness to diversify the economy and boost foreign investor interest.

### FX intervention and reserves level
- Gross foreign assets: declined from US$7.9 billion in 2021 to US$1.4 billion at end-2022, recovered to US$3.7 billion at end-2023 (1.6 months of prospective imports, 5.8 percent of GDP) due to the gold-for-reserves program and improved current and financial accounts.
- 2024 update: trends continued, boosting gross reserves to US$5 billion (2.1 percent of prospective imports, 7.6 percent of GDP) at end-September 2024.
- Assessment:
  - Reserve coverage remains below 3 months of prospective imports.
  - Fund-supported program target: build reserves over the medium term to reach 3 months of prospective imports by end-2026.
  - Supporting factors for reserve buildup: lower external debt service (thanks to debt restructuring), tighter fiscal and monetary policies, increased exchange rate flexibility, and revision of FX auction design to improve FX allocation and price discovery.
  - BoG FX interventions: declined from US$1.9 billion in 2022 to about US$ 1.1 billion in 2023; recent exchange rate depreciation prompted the BoG to increase FX interventions.
  - Recommendation: keep interventions at a minimum to allow continued adherence to international reserve accumulation targets under the ECF arrangement.

### Linkages to fiscal framework and capacity development (selected points from adjacent annexes)
- Fiscal Responsibility Act (FRA) amendments (draft submitted to Parliament on October 23, 2024):
  - explicit debt anchor for central government and central government guaranteed debt: 45 percent of GDP to be achieved by 2034;
  - an operational target: fiscal primary surplus on commitment basis of 1.5 percent of GDP;
  - an escape clause under clearly defined conditions;
  - an independent Fiscal Council to improve oversight and enforcement.
- IMF capacity development priorities aligned with the ECF-supported program include tax policy, revenue administration, public financial management, monetary and exchange rate policy (including FX auction design), macroprudential framework, financial sector supervision, debt management, governance diagnostics, social protection and statistics improvements; selected completed items and expected timelines are noted in program documentation (e.g., TA on tax diagnostics completed in December 2022; TA on FX auction design completed in December 2023; TA on assessing BoG's balance sheet completed in May 2023; TA on fiscal rule and fiscal council completed in mid-2024).

### Risk Assessment (conjunctural and domestic risks and mitigation)
- Conjunctural risks highlighted:
  - Intensification of regional conflicts — likelihood: High; potential impact: High. Mitigations: build external buffers; implement structural reforms to support domestic production/import substitution/economic diversification; improve governance and business environment.
  - Commodity price volatility — likelihood: High; potential impact: High. Mitigations: improve governance and business environment for domestic commodity production and processing; enhance social protection.
  - Social discontent — likelihood: Medium; potential impact: High. Mitigations: strengthen governance and anti-corruption frameworks; implement orderly fiscal consolidation; strengthen social and financial safety nets.
  - Systemic financial instability — likelihood: Medium; potential impact: High. Mitigations: strengthen financial safety nets; monitor bank and NBFIs liquidity and asset quality; design bank and NBFIs recapitalization strategy; encourage acquisitions/mergers if needed.
- Domestic risks:
  - Domestic policy slippages (e.g., due to election (2024) pressures) — likelihood: High; potential impact: High. Mitigations: firm commitment to program implementation, continued exceptional financing, close interaction with development partners to ensure adequate BOP financing.

*Source: 1ghaea2024004-print-pdf - Annex I. External Sector Assessment*

### Appendix I. Letter of Intent

### Appendix I. Letter of Intent

### Program request and adjustments
- Request completion of the third review, completion of the financing assurances review, and a disbursement of SDR 269.1 million.
- Request modification of:
  - the nominal fiscal objectives (primary balance QPC and non-oil revenue IT) through end-June 2025 to reflect macroeconomic developments and a higher nominal GDP projection;
  - the NIR floor between end-March and end-September 2025 to account for large debt restructuring-related payments (both external and domestic).
- Request changes in the TMU to:
  - reflect the impact of a one-off dividend from ESLA on end-December non-oil revenue collection;
  - improve monitoring of the net change in payables and of the social spending floor.
- The MPCC bands through June 2025 were shifted upwards to better reflect the impact of recent macroeconomic developments on expected disinflation trends in 2024.

### Program performance and recent implementation
- Overall assessment:
  - Implementation of the program has been generally satisfactory.
  - All end-June 2024 quantitative performance criteria (QPCs) and all end-June indicative targets (ITs) were met.
  - All structural benchmarks (SBs) due through end-October 2024 but two were met.
    - The end-August 2024 SB (new methodology for the cedi reference rate) was implemented in September.
    - The end-June 2024 SB (cleansing of the taxpayer registry) is expected to be completed by end-December.
- Debt restructuring:
  - Domestic debt restructuring completed in 2023.
  - Agreement with official creditors under the G20 Common Framework on a Memorandum of Understanding reached.
  - Planned Eurobond exchange completed.
  - “Good faith” negotiations ongoing with other external creditors for debt relief on comparable terms and consistent with program parameters.
- Monitoring and transparency:
  - Program will continue to be monitored through semi-annual reviews with QPCs and ITs described in the MEFP and TMU.
  - Continuous performance criteria related to exchange restrictions and multiple currency practices in the context of Article VIII are included.
  - Government agrees to publication of documents submitted to the IMF Executive Board in relation to this request.

### Macroeconomic developments and outlook
- Growth and activity:
  - Real GDP growth accelerated to 6.9 percent in 2024Q2, after 4.7 percent in 2024Q1, and up from 3.8 percent in 2023Q4.
  - Growth drivers: industrial (especially extractive), agricultural (excluding cocoa), and ICT sectors.
  - From expenditure side: household consumption picked up rapidly, aided by acceleration in credit growth; strong rebound in exports outweighed contraction in capital investment.
  - Growth forecast: expect growth to reach 4 percent in 2024 (revised up from 3.1 percent at the time of the second review) and to gradually increase toward long-term potential of around 5 percent in subsequent years.
- Inflation:
  - Declined from a peak of 54.1 percent in December 2022 to 22.1 percent in October 2024.
  - Projected to reach 18 percent by end-2024 (higher than initially envisaged but within outer MPCC bounds).
  - Projected to reach the Bank of Ghana’s medium-term target of 8±2 percent by end-2025.
- External sector and reserves:
  - Preliminary trade data January-August 2024: goods trade balance surplus of 3.1 percent of estimated 2024 GDP, compared to 1.5 percent of GDP over the same period last year.
  - Current account: 1.1 percent of GDP at end-June, up from -1.4 percent at end-2023.
  - Gross international reserves (GIR): US$4.5 billion (1.9 months of prospective imports) at end-June 2024; about US$5 billion at end-September 2024.
  - Improvement driven mainly by expanded gold purchases, more than offsetting lower-than-expected cocoa financing proceeds and significant energy sector payments.
  - Current account projection: after a surplus of 1 percent of GDP in 2024, projected to gradually stabilize at around 1 percent deficit in the medium term.
  - Reserve buffers target: rebuild to 3 months of import cover by the end of the program.
- Risks and shocks:
  - Dry spell in Northern regions during July and August significantly hampered agricultural output; expected to constrain growth and put pressure on food prices in H2 2024.
  - Government expects adverse effects to be mitigated by a robust package of measures.

### Fiscal policy, performance, and measures
- Fiscal consolidation objective:
  - Overarching program objective: achieve a primary surplus of 1.5 percent of GDP by 2025 and maintain it at least until 2028.
- Recent fiscal performance:
  - Primary fiscal balance on a commitment basis moved from a deficit of 4.3 percent of GDP in 2022 to a deficit of 0.3 percent in 2023—an overperformance compared to the targeted 0.5 percent of GDP.
  - On track to improve to a surplus of 0.5 percent of GDP in 2024.
  - 2024 Budget objective: primary surplus (on commitment basis) of 0.5 percent of GDP driven by a 0.9 percent of GDP improvement in non-oil revenue collection and expenditure rationalization.
  - 2024 Mid-Year Budget Review (MYBR) confirms on-track status and recognized a small additional one-off revenue (transfer of dividend from ESLA Fund).
  - VAT underperforming; revenue up to August strong due to buoyant direct taxes and improved collection of several indirect taxes (e.g., gaming and betting taxes, environmental excise duty).
- Responses to fiscal pressures:
  - Energy sector slippages: larger energy sector shortfall projection for 2024 by 0.6 percent of GDP; absorption through a more favorable macroeconomic environment, higher oil and non-oil revenue, and strict adherence to budget appropriations.
  - Dry spell response: action plan with development partners including cash transfers, fertilizers, and grain imports; financed through budget reallocations within agriculture budget, contingency resources, and reallocation of externally-financed projects from the World Bank; expected to remain within 2024 Appropriation Act spending ceilings.
  - Expenditure controls: MoF communicated need for MDAs to adhere to quarterly allotments, reminded MDAs of sanctions for overspending, implementing arrears prevention strategy via a compliance desk and improved monitoring leveraging CAGD payables reporting.
  - Revenue strengthening measures: encourage voluntary declaration on foreign source income leveraging Global Forum data; improve large taxpayer compliance via strengthened audits; work with local governments to revamp property rates; administrative measures to ensure 2024 Budget revenue measures deliver expected yields.
- Contingency and further measures:
  - Stand ready to deploy contingency measures: bring forward some MTRS measures, adjust/reprioritize MDAs’ budget allotments, and adjust quarterly spending allotments based on cash forecasts and domestic debt market conditions.
- 2025 Budget preparation:
  - Due to electoral calendar, submit the 2025 Budget by end-March 2025 (proposed new structural benchmark).
  - 2025 Budget will target a primary balance surplus of 1.5 percent of GDP (from 0.5 percent in 2023), predicated on measures to durably improve non-oil revenue mobilization by 0.6 percentage points of GDP and expenditure allocation in line with the primary deficit objective.
  - An Expenditure in Advance of Appropriation for 2025Q1 was submitted to parliament in October 2024 consistent with PFM Act and program fiscal objectives (prior action).

### Social protection policies and reforms
- 2024 allocations and measures:
  - 2024 Budget increased resources for highly targeted social protection programs by 0.07 percentage points to 0.55 percent of GDP.
  - Doubled LEAP benefits for the second year and enacted automatic inflation indexation of LEAP benefits.
  - Increased Ghana School Feeding Program (GSFP) benefit by 25 percent.
  - Increased allocation for the National Health Insurance Scheme (NHIS) by more than 40 percent to address backlog of medical claim arrears and support accrued claims, essential medicines, and vaccines.
  - Increased Capitation Grant allocation by 25 percent.
  - Commitment to accelerate execution of these programs to meet 2024 social spending objectives.
- Operational issues and corrective actions:
  - Noted delays in budgetary releases to CAGD being passed on to MDAs leading to accumulation of arrears for social program beneficiaries.
  - Intend to clear such arrears by end of the year and remain current on present payment obligations starting in the first quarter 2025.
  - Propose to modify the scope of the IT on social spending to cover payments for social intervention programs from CAGD starting January 1, 2025 to better monitor actual benefit payments.
- Expansion and targets (2025 and medium term):
  - LEAP: finalize beneficiary review, improve targeting toward the extreme poor, and expand LEAP coverage to reach 400,000 households by end-September 2025 (new proposed structural benchmark).
  - GSFP: increase budget allocation by 33 percent to increase calorie intake per meal and improve procurement to reduce overhead costs.
  - Expected social spending outlays: about 0.6 percent of GDP in 2025.
  - Medium-term goals include:
    - expand LEAP coverage and increase benefits to 20 percent of pre-transfer household consumption;
    - increase GSFP meal benefit to cover 30 percent of children’s daily calorie need;
    - reach universal health care coverage and broaden medical interventions covered by NHIS while achieving operational efficiencies (reduce administrative cost, digitalization, enhanced medical audits).
  - Ensure statutory fund reform protects targeted national health insurance programs and recalibrate MDAs’ expenditure portfolios responsible for social spending to better align with SDG targets.

*Appendix I. Letter of Intent — Ghana (Accra, November 13, 2024).*

### 15. We remain committed to completing our comprehensive public debt restructuring to

### 1ghaea2024004-print-pdf - 15. We remain committed to completing our comprehensive public debt restructuring to

### Public debt restructuring: objectives and progress
- Objective: restore a moderate risk of debt distress (as per the IMF-WB LIC-DSF) by 2028 by bringing five external and overall debt ratios below their respective thresholds.
- Target ratios to achieve by 2028:
  - Net present value of public debt to GDP: 55 percent
  - External debt service to revenues: 18 percent
- Debt service relief from external debt restructuring intended to help ensure the program is fully funded through 2026.
- Status and recent actions:
  - Domestic debt restructuring completed last year.
  - Memorandum of Understanding (MoU) with Official Creditors Committee (OCC) under the G20 Common Framework agreed in June 2024; close to securing signatures from all OCC members and working on bilateral implementation agreements.
  - Eurobond restructuring finalized in October 2024.
  - “Good-faith” efforts underway to reach collaborative agreements with other external commercial creditors consistent with program parameters and comparability of treatment; letters sent to largest other commercial creditors to start negotiations.

### External project disbursements and prioritization
- Strategy to align pace of disbursements of external projects with program parameters, covering projects signed before December 2022 and newly contracted debt.
- Disbursement cap: projects signed before December 2022 are capped at US$250 million per year from 2024 to 2026.
- Prioritization criteria:
  - Projects with more than 10 percent of the loan balance disbursed prior to the cut-off date and for which future disbursements exceed debt service.
  - Economic and social significance: health, education and railway projects prioritized.
  - Public safety projects will not be prioritized.
- Contingency: previously identified projects that cannot be financed externally due to the disbursement ceiling could potentially be financed through the budget, provided consistency with achieving budget targets.

### Debt management strategy and market development
- Near-term focus: ensure sufficient domestic financing; medium-term focus: structural market improvements.
- Recent financing pattern: heavy reliance on T-bill issuance over the last two years.
- Resumption plan:
  - Gradual resumption of domestic bond issuances in 2025, starting with a 2-year note and gradually extending tenors to smoothen the debt service profile.
  - Preference for competitive auctions once demand is established; occasional private placements may be used to meet auction shortfalls.
  - Efforts to encourage non-resident investor participation to reduce concentration risk and kickstart the domestic market, while remaining within Fund-supported program parameters.
- Market support measures:
  - Introduction of an underwriting fee to compensate primary dealers for special auctions beyond minimum required target.
  - Increased surveillance on debt issuance from SOEs and other public entities.
  - Strict limits and monitoring on collateralized debt issuance and borrowing on non-concessional terms.
  - Ensure timely debt payments.
- Publication commitments by June 2025:
  - Revised medium-term debt management strategy
  - Annual borrowing and recovery plan
  - Relevant quarterly issuance calendars

### Debt transparency, capacity building, and systems upgrade
- Requested IMF TA to support capacity building in debt sustainability analysis and liability management at the Ministry of Finance’s Debt Management Office.
- Institutional reform considerations to strengthen the Debt Management Office’s role, including post-debt restructuring market development and establishment of an Investment Relations Unit for investor and credit rating agency engagement.
- Systems upgrade: current securities operation infrastructure (CS-DRMS) to be completely upgraded to a modern system by end-December 2024.
  - Objectives: integrate state institutions involved in contracting and servicing public debt, digitalize processes, increase pace of debt service processing, improve accuracy of debt recording and accounting, and improve debt transparency.
- Immediate priority: strengthen monitoring of borrowing and contingent liabilities of key SOEs (COCOBOD, ECG, VRA, GWCL, TOR, GNPC, GNGC, and BOST) and any collateralized debt issuance.

### Monetary policy and exchange rate framework
- Monetary policy stance:
  - Maintain sufficiently tight stance until inflation is on a firmly declining path.
  - Aim to bring inflation back to Bank of Ghana’s medium-term objective of 8 ±2 percent by end-2025.
  - Policy decisions to remain data-dependent; BoG ready to adjust policy stance under the monetary policy consultation clause (MPCC, TMU Section II).
  - Commitment to mop up excess liquidity and ensure policy rate transmission; review reliance on reserve requirements and the new tiering framework.
  - Continued enhancements to Forecast and Policy Analysis System (FPAS), macroeconomic data collection including BoG inflation expectations survey, analytical capacity, and monetary policy communication.
- International reserves:
  - Program goal: rebuild official international reserves (program definition) to at least 3 months of import cover by the end of the program.
  - Overperformance on NIR targets due to measures including Gold-for-Reserves program and limiting bilateral market interventions.
- Reserves management and FX interventions:
  - Continue unwinding swap/sell buy-back operations to reduce expenses linked to borrowed reserves.
  - Gold purchases from domestic producers to continue at market prices; BoG actively managing portfolio risks from gold’s share of reserves.
  - BoG Board to adopt, by June 2025, an internal FX intervention policy document specifying measurable objectives, instruments, transparency, and governance arrangements based on the discretion under constraint approach.
- Exchange rate flexibility and market unification:
  - Adopted in September 2024 a new FX reference rate computation method (end-August structural benchmark); full convergence with wholesale FX market.
  - Thorough assessment of the new methodology by end-April 2025, with actions to ensure a unified foreign exchange market and flexible exchange rate arrangement.
  - Commitment not to introduce policies that create, intensify or modify exchange rate restrictions or multiple currency practices.
  - Move towards FX interventions conducted through auctions open to all banks, with allocations based solely on price and no additional conditions, fees or guidance.

### Bank of Ghana governance, recapitalization, and safeguards
- 2023 IMF safeguards assessment recommendations being implemented:
  - Cabinet approved amendments to the Bank of Ghana Act of 2002 (Act 612) in June (end-May 2024 structural benchmark); amendments to be submitted to Parliament by end-May 2025 (proposed new structural benchmark).
  - BoG Board reviewed and approved new investment policy and guidelines in line with the strategic asset allocation framework in September 2024.
  - BoG working with government to exit the Gold-for-Oil (G4O) program by end-September 2025.
- Recapitalization preparations due to DDEP impact:
  - Ministry of Finance and BoG preparing an MoU to ensure gradual recapitalization consistent with fiscal commitments and debt targets under the program.
  - Possible recapitalization options: budgetary or asset transfers, suspension of profit transfers, and/or use of any buffers generated in program implementation.
  - BoG to adopt by end-June 2025 a strategy to streamline operational costs based on an external efficiency review to strengthen net equity recovery.

### Financial sector: recapitalization, stability measures, and NPL strategy
- Bank recapitalization targets and supervision:
  - Banks with capital shortfalls pledged to recapitalize by at least one-third of the capital required annually for each of the three years ending in 2025 to reach a 13 percent Capital Adequacy Ratio (CAR), without regulatory forbearance.
  - Banks with significant capital shortfalls aim for a more front-loaded recapitalization path to ensure all banks have a positive CAR by end-2024.
  - Banks asked to update recapitalization plans; remedial/corrective measures taken against non-compliant banks since March 2024.
  - New measures to be adopted, proportional to severity of breaches, against banks that have not complied with the two-thirds recapitalization and the non-negative CAR requirements as of end-December 2024 (end-March 2025 structural benchmark).
- Ghana Financial Stability Fund (GFSF) operationalization and support:
  - GFSF Fund A2 component: recapitalization of mainly state-owned and some indigenously owned banks and insurance companies (GHS5.25 billion) and long-term secured loans (GHS0.25 billion) to some mutual funds and unit trusts in the asset management industry as at end-September 2024.
  - Frontloading recapitalizations of state-owned banks with injections underpinned by credible viability plans.
  - World Bank financial sector support operation (targeting undercapitalized banks and Specialized Deposit Institutions) awaiting parliamentary approval; conditional on prior injections by shareholders and feasible viability plans.
  - Government solvency support designed to minimize costs and moral hazard, incentivize private capital injections, foster structural reforms, and allow orderly, early government exit.
- Supervisory measures and PCA framework:
  - BoG incentivizing early recapitalization; most banks ahead of schedule.
  - Banks behind schedule placed on strict enhanced supervision with special reporting requirements on liquidity and solvency and progress on recapitalization plans.
  - Suspension of dividend payments for all banks until further notice to promote capital conservation.
  - Restrictions on excessive risk-taking and certain capital expenditures for banks with shortfalls; BoG ready to deploy other Prompt Corrective Action (PCA) measures if necessary.
- NIB restructuring:
  - Since March 2024, implementing strategy to: i) recapitalize NIB to reduce regulatory capital/liquidity shortfalls and bring NIB’s CAR to positive territory; ii) perform a special review by an international, independent and reputable firm; iii) prepare a forward-looking overarching restructuring plan for NIB (end-March 2025 structural benchmark).
  - Government committed to ensuring NIB’s CAR turns positive by December 2024; final tranche of NIB recapitalization to be executed in 2025 after completion of restructuring steps.
- Addressing credit risks and NPLs:
  - NPLs increased and credit growth slowed after 2022 macroeconomic challenges, though credit growth has picked up in recent months.
  - Multi-pronged approach: strengthen banks’ credit risk management systems and skills; require prompt recognition of asset quality risks, adequate provisioning, timely work-out actions and collections.
  - Banks with NPL ratios exceeding 10 percent required to provide credit action plans to BoG including credit growth targets, risk management strategies, and in-depth NPL analyses.
  - BoG to monitor progress and, where necessary, review and update prudential standards to support sound credit and operational risk management.
- State-owned banks and SDIs:
  - Diagnostic expert to be hired to assess structural challenges in state-owned banks (business models, governance, risk management, and legal framework) to inform a strategy (end-April 2025 structural benchmark).
  - Special review terms of reference for ADB prepared and launch imminent; review results to inform full implementation of restructuring strategy by end-May 2025. BoG intends to divest its share ownership in ADB.
  - For SDIs and other legacy NBFIs, a comprehensive and cost-effective strategy to address legacy issues to be implemented in 2025 with government support as needed; support determined case-by-case, predicated on viability plans and burden-sharing to minimize fiscal costs.
- Regulatory forbearance timeline:
  - Forbearance on recognition of debt exchange losses in CAR computations being lifted by one-third each year from January 2023 through end-2025.
  - Schedule for lifting other temporary forbearances (including lowered minimum CARs) to commence end-June 2025.
  - Review of tiered CRR to support elimination of supervisory forbearance on non-compliance by some banks by end-June 2025.
  - Authorities monitoring unintended consequences and will adjust as needed.

*Source: 1ghaea2024004-print-pdf - 15. We remain committed to completing our comprehensive public debt restructuring to*

### 34. We will complete ongoing reforms to enhance financial sector stability and support

### 34. We will complete ongoing reforms to enhance financial sector stability and support

### Financial sector reforms and SME credit
- Review and monitor off-balance sheet items.
- Complete the roll out of Basel II and III capital, liquidity, and supervisory review reforms.
- Build and implement strategies to improve operational efficiency, business models, competitiveness of state-owned banks and NBFIs.
- Strengthen the nascent deposit insurance scheme.
- Implement initiatives to expand SME credit through qualifying participating financial institutions with the support of the DBG and external development partners.
- Consider further measures to reduce the nexus between the sovereign and financial institutions to prevent crowding out of credit to the private sector.

### Structural Fiscal Reforms
- Prioritize reforms to entrench fiscal discipline, ease budget rigidities, and bolster transparency.
- Reforms designed together with Fund/WB staff, drawing on strategies in public financial management, medium-term revenue mobilization, energy sector recovery, and rationalization of statutory funds.

### Fiscal Framework and Institutions
- Submitted to parliament (end-October 2024 structural benchmark) amendments to the 2018 Fiscal Responsibility Act (FRA) to strengthen fiscal discipline.
- Amendments: add a debt anchor covering central government and publicly guaranteed (with objective of broadening coverage over the medium term); set operational rules to ensure achievement of the anchor by 2034; clearly define escape clauses and correction mechanisms.
- Reform the Fiscal Advisory Council to provide strong operational independence and adequate resources; Council to make independent assessment of key macro-fiscal projections at Budget submission and evaluate fiscal performance against the fiscal rule.
- Publish fiscal strategy document and fiscal risk statements in 2025 consistent with the PFM Regulation and international best practice.
- Expect amendments to FRA to be enacted by end-September 2025 (proposed new structural benchmark).
- Intend to submit a new Extractive Industry Fiscal Regime Bill by end-July 2025; draft prepared with Fund support.

### Revenue Administration and Tax Policy
- Strengthened revenue administration to ensure 2024 Budget measures deliver expected yield:
  - Strengthened VAT enforcement on residential accommodations, including mandating VAT payments through the GRA online portal.
  - Enhanced audits on large taxpayers of PIT, CIT, and VAT.
  - Started publishing quarterly compliance report data on the GRA website.
  - Rolled out the e-VAT system to 1441 taxpayers (including 650 large taxpayers) as of August 2024 and expect to cover another 1209 taxpayers by end-December 2024.
- Cleansing of GRA’s taxpayer register and revamping ITAS took longer than anticipated; will complete the cleansing and submit final report to the Ministry of Finance (end-June 2024 structural benchmark) in the next few weeks.
- Developed data quality requirements and a data governance framework.
- Established governance structure for ITAS (project steering committee, project manager, project team) to meet end-December 2024 SB; initiated migration of the taxpayer service module to new system in November.
- Determined to finalize operationalization of major ITAS modules (taxpayer registration, return filing and payments) by end-December 2024 (structural benchmark).
- Medium-term reforms under the Medium-Term Revenue Strategy (MTRS) aim to broaden the tax base, minimize tax avoidance, and foster a progressive tax system.
- Perform a mid-implementation review of the MTRS by end-March 2026 with IMF support to assess progress and identify timebound corrective actions.

### Public Spending Efficiency and Transparency
- Commit to review public spending portfolio to identify efficiency gains:
  - Launch review of all government flagship programs by end-March 2025; publish a rationalization strategy by end-December 2024.
  - Comprehensive public expenditure review with the World Bank expected to be finalized by end-June 2025.
  - Complete a functional review of selected MDAs by end-September 2025 to guide wage calibration.
  - Integrate HRMIS system with GIFMIS budget module and the Payroll system by end-December 2025 to strengthen controls on “ghost names”, promotions, hiring and payroll costs.
- Efficiency gains intended to create fiscal space for development, social and climate-related priorities.

### Public Financial Management (PFM)
- Cash management:
  - Aligned quarterly budgetary allotments to MDAs and Statutory Funds on GIFMIS with 3-month cash forecasts; required MDAs to revise cash plans.
  - Enhance coordination among Budget division, Treasury and Debt Management divisions (TDMD) and Controller and Accountant General’s Division (CAGD).
  - Strengthen enforcement of sanctions for entities spending above quarterly allotments; established a compliance desk at the Ministry of Finance to verify infractions and liaise with the Attorney General; training of finance officials on evidentiary requirements for prosecution under the PFM Act rolled out.
- Public procurement:
  - Integrate GHANEPS with GIFMIS (end-December 2024 structural benchmark) to ensure only projects/purchase orders with approved budgets/allotments proceed to tender.
  - Target to increase proportion of procurement (by value) registered in GHANEPS to 50 percent of total procurement in 2025Q2 and to 90 percent of total procurements in 2025Q4.
  - Publish 2023 annual report on public procurement in December 2024 on the PPA website; provide link between GHANEPS and ORC website for beneficial ownership information.
  - Update strategy to reduce non-competitive procurement (measured in value) based on PPA’s annual assessment findings.
- Treasury Single Account (TSA):
  - Integrate all MDAs, MMDAs and IGFs accounts in BOG and commercial banks to the TSA by end-March 2026.
  - Tightly integrated GIFMIS with existing payment systems (SWIFT, GhIPSS, ACH) for real time exchange of data on net balances.
  - Bring onboard 549 additional MDA and MMDA spending unit accounts into GIFMIS during May 2024 through end-March 2025 (structural benchmark).
  - Roll out automatic bank reconciliation (ABR) functionality for all GIFMIS-linked accounts by end-December 2025; complete TSA reforms by the end of the IMF-supported program.
- Statutory Funds:
  - Cabinet to adopt amendments to merge funds identified as redundant with their line ministries by end-June 2025 (structural benchmark).
  - Broaden GIFMIS coverage to all spending units; enforce use through enhanced oversight and periodical reviews for NHIF, GETFund, Road Fund, District Assemblies Common Fund and IGF-reliant institutions.
  - Establish mechanism to ensure earmarked funds do not engage in collateralization of receivables.
  - Require all earmarked funds to submit audited financial statements, clear audit backlog, and implement audit recommendations.
- Reporting:
  - Initiated quarterly submission of budget performance by MDAs in June 2024.
  - Ensure SOEs start submitting financial reports to CAGD.

### Public Investment Management
- Submitted to Cabinet a centralized inventory of all ongoing and planned public investment projects in March 2024.
- Enabled “Blanket Purchase Agreement” functionality in GIFMIS to capture multi-year commitments consistent with MTEF ceilings.
- MoF issued circular in July 2024 making use of this functionality mandatory for all multi-year contracts (end-September 2024 structural benchmark).
- CAGD/MOF to ensure GoG projects are fully captured in GIFMIS under blanket purchase agreements and publish list of public investment projects with the budget document.

### Arrears Clearance and Prevention
- Continue implementation of Arrears Clearance and Prevention Strategy:
  - Annual arrears clearances consistent with the medium-term budget framework.
  - From the 2025 Budget, include a separate budget line for MDAs to reflect allocations for arrears clearance.
  - Systematically collect information on stock of payables and payments made by MDAs per economic classification.
  - Ensure all budgetary central government entities report and participate in validation of payables data by CAGD during quarterly and annual national accounts preparation.
  - Apply appropriate sanctions by MoF and Auditor General in case of non-compliance consistent with PFM Act.
  - Newly established PFM compliance desk at MoF to create a reporting system of payables evolution institution by institution.

### Energy Sector Measures
- Holistic approach under the Energy Sector Recovery Programme (ESRP) combining immediate measures and structural interventions to reduce energy sector shortfall, increase transparency and governance, promote financial recovery, reform ECG, and safeguard the broader economy.
- Immediate actions taken:
  - PURC applied its tariff formula consistent with the 2022-25 Electricity and Water Major Tariff Review and related rate setting guidelines, increasing electricity tariffs by 3 percent on average as of October 1, 2024.
  - ECG launched a revenue drive in 2024Q4 to increase revenue collection by at least 10 percent compared to 2023, including accelerated deployment of smart meters and enhanced monitoring.
  - ECG ceased to procure liquid fuel since end-September 2024.
  - Resources to procure emergency liquid fuel are now made available through the CWM.
  - Switch to natural gas implemented, except for emergency situations.
  - Starting in October 2024, ECG has been implementing the CWM fully, consistent with the CWM guidelines requiring ECG to declare to PURC all tariff bills collected and payments made to Tier 1 and Tier 2 claimants.
  - In October 2024, Cabinet instructed ECG to seek prior approval from the Minister of Finance and the Minister of Energy before initiating any new capital expenditures not included in the 2022 Major Tariff Review.
  - Publish on the PURC’s website the audit of the Validation Report of ECG Revenue/Collection Accounts for October 2023-June 2024; audit completed with an unqualified opinion from the auditors (new proposed end-January structural benchmark).
  - Drafted ToR for a consultant to prepare a restructuring strategy to open ECG’s operations to private sector participation, including a comprehensive technical and financial audit of ECG’s operations (prior action); expect draft strategy to be completed by end-June 2025 and adopted by Cabinet by end-September 2025 (new proposed structural benchmark).
  - Develop a framework in consultation with Fund staff to guide granting of energy sector subsidies by December 2024, including mechanism to insulate vulnerable population fully or partially from large tariff increases.
- Planned initiatives and transparency measures:
  - Conduct 2023 energy sector legacy debt validation audit to be finalized by end-March 2025; finalize 2024 debt validation audit by end-August 2025.
  - PURC to publish audited quarterly validation of ECG’s revenue and collection accounts and take corrective actions.
  - PURC to publish monthly CWM Validation reports (with a 2-month lag) confirming compliance with CWM Guidelines.
  - PURC to continue quarterly tariff adjustments consistent with the 2022-25 Major Tariff Review and to implement a major tariff review in September 2025; PURC will publish Decision paper (technical notes) within 30 days of tariff decision and share financial model with IMF and World Bank staff (proposed new quarterly structural benchmark).
  - Strictly enforce revised guidelines of the cash waterfall mechanism and ensure a monthly fixed payment to IPPs for energy purchase.
  - Finalize agreements and conclude negotiations on legacy arrears and restructured contracts with IPPs, ensuring cabinet and parliamentary or executive approval as needed.
  - PURC will implement a major tariff review by end-September 2025 with associated tariff adjustment from October 1, 2025 (proposed new end-September 2025 structural benchmark).
  - Review PURC methodology for quarterly adjustment of electricity tariffs by end-2024 with IMF and WB support to reduce discretion and ensure macroeconomic indicators are fully and timely reflected.
  - Amend legislation to mandate distribution licensees to procure new generation or enter into new PPAs only through competitive tendering; Energy Commission and PURC to issue implementing guidelines and standard procurement documents and PPAs (including for renewable energy).
  - ECG to design an investment plan for tariff determination for 2025 MYTO to be reviewed and approved by PURC; PURC will monitor implementation quarterly.
  - Energy Commission and PURC to develop stringent KPIs for ECG to be strictly reported and monitored quarterly.

*Source: 1ghaea2024004-print-pdf — GHANA, INTERNATIONAL MONETARY FUND*

### 48. We are strongly committed to implementing our Cocobod turnaround strategy, which

### We are strongly committed to implementing our Cocobod turnaround strategy

### Cocobod turnaround strategy and cocoa sector financial measures
- The Cocobod turnaround strategy was published in October 2024 and introduces a framework (developed in consultation with the Fund and Bank) for setting farmgate prices to ensure sufficient revenues for farmers while allowing Cocobod to raise enough revenues to recover its operational and financial costs starting from 2024.
- Farmgate prices for the 2024 and 2025 seasons are to be set between 60-70 percent of the FOB international price inclusive of Living Income Differential; this price range will be reviewed every two years.
- The government recently announced a farmgate price of cocoa of 49, 6  00GHs per ton for the 2024/25 season, described as consistent with the average expected sales price for the season and expected to help maintain a balanced cash flow situation.
- A functional review of all departments and subsidiaries of the Board has been initiated by an external consultant to identify cost-cutting and cost rationalization measures, including scaling back quasi fiscal spending on cocoa roads, fertilizer, and pesticides programs.
- Cocoa roads portfolio was significantly streamlined from GHS21 billion to GHS6 billion after review of outstanding contracts (performance, termination costs).
- Commitment: no new contracts for cocoa road construction nor engagement in construction and repair/maintenance of roads going forward.
- Cocobod will refrain from mobilizing any non-concessional funding and/or any collateralized funding—except for its annual syndicated loan.

### Ministry of Finance oversight and contingency planning
- The Ministry of Finance (MoF) is strengthening financial oversight and is actively participating in price-setting deliberations; a cocoa desk has been established at the MoF.
- Funding plans will be reviewed regularly and associated with contingency planning exercises.
- Should downside risks materialize, Cocobod will scale down spending further to ensure a balanced financial position.

### Governance and anticorruption commitments
- Publish the IMF technical assistance report on the Governance and Anti-Corruption Diagnostic Assessment once finalized.
- 2024: an evaluation of the ten-year National Anticorruption Action Plan (NACAP) was undertaken with UNODC; this evaluation and the IMF Governance Diagnostic Assessment will inform an updated NACAP to be finalized before end-September 2025.
- Prepare, in consultation with IMF staff, a new asset declaration verification regime for public officials and submit to parliament a new bill by end-September 2025 (structural benchmark); the bill will introduce provisions to ensure timely submission and an effective verification system.
- Continue implementing recommendations from the Auditor General’s report on audit of Covid-19 spending; the AG office will publish an implementation follow-up report by the end of 2024.

### AML/CFT enhancements
- Preparations for GIABA Third Round Mutual Evaluation (planned for 2025): a National Risk Assessment has started to update understanding of ML/TF/PF risks to inform mitigating measures.
- The Financial Intelligence Center (FIC) will continue engagement, sensitization, training, and capacity building for all reporting entities on AML/CFT topics (including CDD, risk assessment, trends and typologies), and collaborate with sectoral supervisors for enforcement of targeted financial sanctions.
- Reinforce preventive measures for Designated Non-Financial Businesses and Professions (priority sectors: real estate, casinos, dealers in precious metals and precious stones) by increasing sensitization and capacity building and enhancing framework for filing suspicious transaction reports.
- Strengthen transparency of Beneficial Ownership (BO) of legal entities, including implementing recent FATF R.24 updates (March 2022):
  - By end-December 2024, significantly improve disclosure of BO by all legal entities which predate the Companies Act, 2019 (Act 992) and enforce existing measures for non-compliance.
  - The Companies Act, 2019 (Act 992) mandates BO disclosure prior to company incorporation.
  - Starting in 2025, systematically apply proportionate and dissuasive sanctions to legal entities that fail to comply.
  - Develop a new system to facilitate and enhance timely access to the BO register; expected to go live by end of 2024.

### Growth strategy and structural reforms to boost private investment and inclusive growth
- Improving the business environment:
  - By end-December 2024: fully digitalize new business registration through the Company Registration system; operationalize the construction permitting portal; approve and implement—with World Bank support—the Regulations of the Private Public Partnership Act and of the Corporate Insolvency and Restructuring Act.
- Attracting FDI:
  - June 2024: amendments submitted to Parliament to Ghana’s GIPC Act to substantially reduce minimum foreign capital requirements.
  - By end-2024: roll out an e-visa system for all visitors and introduce an investors grievance mechanism.
  - By end-2025: enact a new Investment Law with World Bank support.
- Boosting export competitiveness and AfCFTA implementation:
  - By end-2024: build full capacity to enable Ghanaian businesses to leverage AfCFTA implementation and update the 2005 Trade Policy; crystallize reforms into a five-year Trade Sector Support Programme.
  - Accelerate adoption of measures under the WTO Trade Facilitation Agreement Implementation Action Plan for Ghana.
- Upskilling workforce and social inclusion:
  - Make the Free Senior High School program more efficient and strengthen uptake by poorest households; provide support for out-of-school children to access formal education and skills training; expand skills training and identify critical skills gaps with the private sector.
- Sectoral and industrial policy reforms:
  - Reoriented and launched Planting for Food and Jobs program (PfJ 2.0) to rationalize fertilizer subsidies and improve land access and development.
  - Expanded Economic Enclave Projects for medium to large scale agricultural production and agro-processing.
  - By end-2024: Cabinet will adopt a new Industrial Parks and Special Economic Zones Policy and a new Special Economic Zones Act will be approved—along with related regulations.
- Improving access to finance:
  - Development Bank Ghana has been operationalized (with World Bank, AfDB, EIB, KfW support) to provide long-term funding to financial institutions to on-lend to creditworthy enterprises in agribusiness, manufacturing, and high value services.
- Encouraging digitalization:
  - Further expansion of broadband mobile coverage and improvement of digital skills in school and through trainings.

### Program monitoring, performance criteria, and structural conditionality (high-level)
- The program will be monitored semi-annually through:
  - Quantitative performance criteria,
  - Continuous performance criteria related to Article VIII,
  - A monetary policy consultation clause,
  - Indicative targets,
  - Structural benchmarks.
- A Memorandum of Understanding between the government and the BoG sets responsibilities for servicing financial obligations to the Fund.
- The document lists multiple specific performance criteria, indicative targets, and structural benchmarks across 2024–2025 (examples and exact figures appear in the program tables and conditionality schedules).
- Selected explicit structural benchmark commitments (dates preserved exactly as in source):
  - Present to the BoG Board a risk assessment report of the gold-for-oil program and an exit strategy—End-June 2024 (Met).
  - GRA to share final report of taxpayer register cleaning project—End-June 2024 (Not Met).
  - BoG to finalize ToR for a special review of NIB—End-July 2024 (Met).
  - Adopt revised BoG reference rate setting methodology—End-August 2024 (Not Met, implemented with delay).
  - Complete diagnostic of cost-effectiveness of post-CoD projects and finalize prioritization strategy—End-August 2024 (Met).
  - Enable “Blanket Purchase Agreement” functionality in GIFMIS—End-September 2024 (Met).
  - Submit to parliament draft amendments to the Fiscal Responsibility Act—End-October 2024 (Met).
  - Operationalize the Integrated Tax Administration System—Reset to end-December 2024.
  - Fully integrate GHANEPS with GIFMIS—End-December 2024.
  - Following special review, prepare forward-looking restructuring plan for NIB—End-March 2025.
  - BoG remedial measures for banks breaching recapitalization and CAR requirements—End-March 2025.
  - MoF to onboard 549 MDAs and MMDAs spending unit accounts into GIFMIS—End-March 2025.
  - Design strategy to ensure state-owned banks adopt sound governance and risk management—End-April 2025.
  - Adopt necessary legislation to implement strategy to streamline statutory funds—End-June 2025.
  - New structural benchmarks include PURC publication of Validation Report of ECG Revenue/Collection Accounts audit—End-January 2025; quarterly PURC tariff adjustments starting end-January 2025; submission to Parliament of a 2025 Budget consistent with program targets—End-March 2025; submission of BoG Act amendments—End-May 2025; enact amended Fiscal Responsibility Act—End-September 2025; submit new asset declaration bill—End-September 2025; finalize LEAP beneficiary review and expand LEAP coverage to reach 400,000 households—End-September 2025; Cabinet approves ECG restructuring strategy—End-September 2025; PURC implements planned major tariff review at end-September with adjustment as of October 1, 2025—End-September 2025.

*Source: 1ghaea2024004-print-pdf*

### 1. This Technical Memorandum of Understanding (TMU) sets out the understandings regarding

### This Technical Memorandum of Understanding (TMU) sets out the understandings regarding

### Overview
- Sets out definitions of performance criteria (PCs), indicative targets (ITs), and consultation clauses under the Extended Credit Facility as specified in the authorities’ Letter of Intent (LoI) and Memorandum of Economic and Financial Policies (MEFP) of June 28 and attached tables.
- Describes methods for assessing program performance and information requirements for monitoring targets.

### Program exchange rates and gold price
- Exchange rates for program purposes are specified in the Table (Rates as of February 28, 2023).
- Gold price for program purposes: US$ 1,826.92 per ounce (as per Bloomberg data as of February 2023).

### Definition of central government (for program monitoring)
- Central government comprises:
  - central government;
  - all special funds (including the Ghana Education Trust Fund, the Road Fund, the District Assemblies Common Fund, the National Health Insurance Fund and Mineral Income Investment Fund);
  - all subvented and other government agencies classified as government in the Bank of Ghana (BoG) Statement of Accounts (SOA).
- Excluded from central government: Social Security and National Insurance Trust (SSNIT) and public enterprises, including Cocobod.

### Continuous performance criteria (monitored continuously)
- Standard criteria applicable to all Fund arrangements:
  - no imposition or intensification of restrictions on the making of payments and transfers for current international transactions;
  - no introduction or modification of multiple currency practices;
  - no conclusion of bilateral payments agreements inconsistent with Article VIII of the IMF Articles of Arrangement;
  - no imposition or intensification of import restrictions for balance of payments reasons.
- Note: Revision of the BoG reference rate methodology (end-August 2024 SB) and introduction of competitive price-based FX spot auctions (MEFP¶38), conducted in consultation with IMF staff, would not constitute an introduction or modification of multiple currency practices (MCPs).

### A. Net International Reserves (NIR) of the Bank of Ghana, Floor (Millions of U.S. Dollars)
- Definition:
  - NIR = reserve assets minus short-term foreign-currency liabilities and liabilities to the Fund.
  - All non-U.S. dollar values converted to U.S. dollars using program exchange rates and gold price (¶2).
- Reserve assets (RA) include:
  - Bank of Ghana holdings of monetary gold, SDRs, foreign currency cash, foreign currency securities, deposits abroad, and the country’s reserve position at the Fund.
  - Excluded: assets that are pledged, collateralized, or otherwise encumbered; claims on residents; precious metals other than gold; assets in nonconvertible currencies; illiquid assets.
  - Encumbered assets include Ghana Petroleum Heritage and Stabilization Fund and Bank of Ghana deposits with Ghana International Bank London.
- Short-term foreign-currency liabilities include:
  - Bank of Ghana contractual foreign-currency obligations to residents and nonresidents scheduled to come due during the 12 months ahead, comprising Deposits of International Institutions, Liabilities to International Commercial Banks, FX Swaps with non-resident and resident banks, foreign currency deposits held at the BoG.
  - Excluded: liabilities with an asset counterpart that is encumbered (also excluded from the asset side).
- Liabilities to the Fund:
  - include all outstanding use of IMF credit, including IMF budget support for the MoF.
  - exclude SDR allocations.
- Adjustors:
  - NIR floors adjusted upward for any excess of budget grants, loans, and foreign exchange received in the context of the sales of 5G spectrum licenses, relative to the program baseline, except where used to repay outstanding domestic arrears faster than programmed.
  - NIR floors adjusted downward for any shortfall in budget grants and loans relative to the program baseline.
  - NIR floors adjusted upwards by the full amount of the debt service payments on commercial claims in the restructuring perimeter below the amounts in the program baseline.
- Reporting and conversion: All values not in U.S. dollars are to be converted to U.S. dollars using the program exchange rates and gold price defined in ¶2.

### B. Bank of Ghana Claims on the Central Government and Public Entities, Cumulative Ceiling (Billions of Cedis)
- Definition:
  - Outstanding gross credit to central government and public entities (listing of 14 entities including Tema Oil Refinery; Ghana National Petroleum Company; Ghana National Gas Company; Volta River Authority; Electricity Company of Ghana; Ghana Grid Company Ltd (GRIDCO); Ghana Water Company Limited; Ghana Infrastructure Investment Fund (GIIF); Daakye PLC; Energy Sector Levy Act (ESLA). PLC; Asanti Gold Corporation; Cocobod; Ghana Integrated Aluminium Development Corporation (GIADEC); Bulk Oil Storage and Transportation (BOST)).
  - Measured as change from start of program and net of stock adjustment from debt operations (e.g., capitalization of interest), of:
    - all BoG loans and advances to central government and public entities;
    - all central government and public entities overdrafts;
    - face value for all outstanding Government of Ghana treasury bills, notes and bonds purchased by BoG in primary and secondary market.
  - For TMU, stock includes all called guarantees given by BoG for operations between central government/public entities and third parties.
  - Exclusions:
    - BoG holdings of Government of Ghana T-bills as collateral from commercial banks;
    - BoG reversible market transactions involving Government of Ghana securities;
    - BoG loans to central government from on-lending IMF resources through SDR allocations and PRGT loans.

### C. Present Value (PV) of Newly Contracted or Guaranteed External Debt by the Central Government and Public Entities, Cumulative Ceiling (Millions of U.S. Dollars)
- Definition and scope:
  - External debt defined on a residency basis; “debt” per 2014 Guidelines on Public Debt Conditionality (Executive Board’s Decision No.15688-(14/107)).
  - Debt understood as a current contractual liability requiring future payments in assets or services (¶8(a)).
  - Forms include loans, suppliers’ credits, and leases (with PV at inception for leases) (¶8(a)(i)-(iii)).
  - Arrears, penalties, and judicially awarded damages arising from failure to make payment under a contractual obligation that constitutes debt are debt (¶8(b)).
- Applicability:
  - Ceiling applies to cumulative PV of new external debt contracted or guaranteed by central government and listed public entities (same list as in ¶10), excluding annual syndicated trade financing facility for Cocobod.
  - Applies to debt and commitments contracted or guaranteed for which value has not yet been received, including private debt with official guarantees.
- Contracting and exclusions:
  - Debt is considered contracted when all conditions for entry into effect are met in accordance with contract and national legislation.
  - Contracting of credit lines with no predetermined disbursement schedules or with multiple disbursements is considered contracting of debt.
  - Exclusions from the ceiling:
    - loans and bonds from restructuring/rescheduling/refinancing of external debt;
    - renewal of an existing suppliers’ credit;
    - rollover of a credit line;
    - short-term debt including suppliers’ credit and credit lines with maturity < 6 months for specified public entities;
    - debt contracted from the IMF, World Bank and AfDB;
    - Government of Ghana securities issued in domestic currency, placed domestically and held by non-residents.
- Guaranteed debt:
  - An explicit promise by the central government and public entities to pay or service a third-party obligation (¶13).
- PV calculation and discounting:
  - PV at signing date calculated by discounting future debt service payments using unified discount rate of 5 percent (Executive Board Decision No. 15248-(13/97)) (¶14).
- Concessionality:
  - Debt is concessional if it has at least a grant element of 35 percent (¶15).
  - Grant element = (difference between PV debt and nominal value) expressed as percentage of nominal value.
  - For debts with grant element ≤ zero, PV set equal to nominal value.
- Variable-rate loans:
  - For variable interest rate loans of form benchmark rate plus fixed spread, PV calculated using program reference rate plus the fixed spread (in basis points) specified in contract (¶16).
  - Program reference rate for three-month U.S. SOFR: 2.97 percent (fixed for program duration).
  - Spread of three-month JPY TIBOR over three-month USD SOFR: -300 basis points.
  - Spread of three-month U.K. SONIA over three-month USD SOFR: 50 basis points.
  - For currencies other than Euro, JPY, and GBP, spread over three-month USD SOFR: 0 basis points.
  - Where variable rate linked to a benchmark other than three-month USD SOFR, a spread reflecting the difference (rounded to nearest 50 bps) will be added.
- Reporting requirements:
  - MOF will immediately report to IMF staff details of any new external loans before being contracted or guarantees before being issued by central government and specified public entities.
  - MOF to provide monthly, within 30 days from end of each month, detailed data on all new concessional and non-concessional external debt contracted or guaranteed by central government and specified public entities, including:
    - amounts contracted or guaranteed;
    - currencies;
    - terms and conditions, including interest rates, maturities, grace periods, payments per year, commissions and fees, and collaterals.
- Adjustors:
  - PV of newly contracted or guaranteed external debt will be adjusted upward for excesses in contracted concessional project loans relative to the baseline (¶18).

### D. Primary Fiscal Balance of the Central Government, Commitment Basis, Cumulative Floor (Millions of Cedis)
- Definition:
  - Primary fiscal balance is cumulative from the beginning of the fiscal year.
  - Measured as difference between primary balance on cash basis from financing side and net change in stock of payables (“outstanding payments”) of central government reported in GIFMIS, including:
    - payables of statutory/earmarked funds defined as outstanding payments from consolidated funds to SFs;
    - energy sector: difference between total fixed cost bills received by ECG from IPPs and fuel suppliers and the payment made by ECG and the Government of Ghana on energy obligations related to current and past years, including exchange adjustment and Natural Gas Clearinghouse credit notes.
  - Positive net change in stock of payables means more payables built up than cleared over period (so primary balance on cash basis is stronger than on commitment basis).
  - Excludes financial sector cost (government support to strengthen financial sector under program).
- Primary balance on cash basis measurement:
  - Sum of net financial transactions of central government (¶3) comprising:
    - net foreign borrowing (¶20);
    - net domestic financing (¶21);
    - receipts from net divestitures;
    - net drawing out of oil funds;
    - minus domestic and external interest payments.
  - Excludes financing for financial sector recapitalization.
- Net foreign financing (¶21):
  - Sum of project and program loans by official creditors and commercial external borrowing, minus amortization due.
- Net domestic financing (¶22):
  - Change in government deposits plus domestic debt issuance proceeds, minus domestic debt amortization due.
- Adjustors:
  - Primary balance floor for March 2024–December 2025 adjusted for excesses and shortfalls in disbursed concessional project loans relative to program assumptions.
  - Primary balance floor adjusted downward (upward) for full amount of any excess (shortfall) in concessional project loans relative to the baseline.
  - Primary balance floor adjusted upward by full amount of non-tax revenue proceeds from sale of 5G Spectrum licenses.

### E. Non-Accumulation of External Debt Payments Arrears by the Central Government and the Bank of Ghana, Continuous Ceiling (Millions of U.S. Dollars)
- Definition:
  - External payment arrears accrue when payments such as interest or amortization on debts of the government (¶8) to non-residents are not made within contract terms, accounting for applicable grace periods.
  - Excludes arrears relating to debt subject to renegotiation (dispute or ongoing renegotiation) or rescheduling.
  - Monitored continuously.

### F. Newly Contracted Collateralized Debt by the Central Government and the Public Entities, Cumulative Zero Ceiling
- Definition:
  - Collateralized debt: any contracted or guaranteed debt that gives creditor rights over an asset or revenue stream allowing reliance on that asset or revenue stream for repayment if borrower defaults.
- Applicability:
  - Ceiling applies to debt contracted or guaranteed by central government and specified public entities (same list as in ¶27, with Cocobod exclusion of annual syndicated trade financing facility).

### Specified numerical series (as presented)
- Sep-24 254.95
- Dec-24 74.4
- Mar-25 117.3
- Jun-25 234.6
- Sep-25 351.9
- Dec-25 469.2

### Monetary policy consultation clause
- Monetary policy consultation clause is indicated (heading present), details follow in TMU.

*Source: Technical Memorandum of Understanding (TMU) — program monitoring definitions, targets, and reporting requirements.*

### 28. The consultation bands around the projected 12-month rate of inflation in consumer prices

### 28. The consultation bands around the projected 12-month rate of inflation in consumer prices

### Inflation consultation framework
- The consultation bands are specified in the Performance Criteria table in the MEFP and use the headline consumer price index (CPI) published by the Ghana Statistical Service.
- If the observed 12-month rate of CPI inflation falls outside the lower or upper outer bands specified in the PC table for the relevant test dates:
  - The authorities will complete a consultation with the IMF Executive Board focusing on:
    - (i) the stance of monetary policy and whether the Fund-supported program remains on track;
    - (ii) the reasons for deviations from the program targets, taking into account compensating factors; and
    - (iii) proposed remedial actions if deemed necessary.
  - Access to Fund resources would be interrupted until the consultation takes place and the relevant program review is completed.
- If the observed 12-month rate of CPI inflation falls outside the inner bands specified for the end of each quarter in the Performance Criteria table, the authorities will conduct discussions with Fund staff.

### Central bank foreign exchange intervention (FXI)
- FXI is defined as the total of BoG FX sales to commercial banks in:
  - (i) the spot market
  - (ii) the regular FX auction
  - (iii) the special FX auction including for fuel distributors and 1-week forward auctions under the Domestic Gold Purchase program.

---

### G. Non-Oil Public Revenue, Cumulative Floor (Millions of Cedis)

### Definition of non-oil revenue
- Central government’s total non-oil revenue includes:
  - Total tax revenue—all revenue collected by the GRA, whether they result from past, current, or future obligations such as Direct Taxes (taxes on income and property), Indirect Taxes (excises, VAT, National Health Insurance Levy (NHIL), GETFund Levy, Covid-19 Health Levy, E-Levy, and Communication Service Tax (CST)), and Trade Taxes.
  - Total non-tax revenue—including IGFs retention, Fees and Charges, Dividend/interest and profits from oil and others, Surface rental from oil/PHF interest, property rate collection and yield from capping policy.
- Excludes grants, oil revenue as defined in ¶30, social security contributions and ESLA proceeds.
- Total non-oil revenue is recorded on a cash basis.
- Oil revenue is defined as the central government’s tax and non-tax net proceeds from the sale of oil, excluding any revenue allocated to Ghana National Petroleum Corporation (GNPC).

### Adjustors to the non-oil revenue floor
- Total non-oil revenue floor will be adjusted upward for the full amount of the non-tax revenue proceeds of the sale of 5G Spectrum licenses.
- The non-oil revenue floor will be adjusted upward (downward) by the amount received as the one-off dividends revenue from the ESLA bond closure program in excess (shortfall) of the program assumption.

---

### H. Ceiling on the Disbursement of Total Committed but not yet Disbursed External Bilateral and Commercial Project Loans pre-end-December 2022 (Millions in USD)

### Definition
- The ceiling applies to the total contracted but not yet disbursed project loans to the central government from official external and commercial creditors.
- The ceiling includes disbursements resulting from undisbursed projects contracted before the OCC cut-off date.
- External debt is defined as in paragraph 9 above.

### Reporting requirement
- Detailed data on the total amount of contracted but not yet disbursed external project loans of bilateral creditors pre-OCC cut-off date will be provided on a quarterly basis, within 30 days from the end of each quarter, including amounts, currencies, creditors, and project names.

---

### I. Social Spending, Cumulative Floor (Millions of Cedis)

### Definition
- The expenditure floor on poverty-reducing social programs of the central government will include:
  - Disbursement of the National Health Insurance Fund used to pay for medical claims, essential medicine, and vaccines;
  - Payment received from CAGD to the respective line ministries for the Ghana School Feeding Program, the Livelihood Empowerment Against Poverty Program, and the Capitation Grant.
- Measured expenditure excludes all donor-supported expenditure and is measured as consolidated funds’ releases to MDAs.

---

### J. Net Change in the Stock of Payables of the Central Government and of Payables to IPPs, Ceiling (Millions of Cedis)

### Definition
- Stock of payables is the sum of two components:
  - First, the stock of payables of the central government reported by CAGD at the end of each quarter. CAGD payables report covers the stock of payables of all budgetary central government entities (a subset of the entities which are part of the CAGD annual and quarterly account preparation for central government).
  - Second, the stock of energy sector payables: for 2024 these comprise energy-sector-related outstanding payments of the ECG and GNPC (including those to be paid by the MoF) to power generators (both IPPs and energy State Owned Enterprises) and fuel suppliers.
- Payables denominated in US$ will be assessed at the end of period exchange rate computed as the average daily exchange rate in the last month of the period.

---

### Provision of data to the Fund and reporting timetable

### General data provision commitments
- Data with respect to variables subject to performance criteria and indicative targets will be provided monthly with a lag of no more than eight weeks (except for select data for which the reporting lag is explicitly specified in Table 1).
- Authorities will transmit promptly to Fund staff any data revisions.
- Authorities will consult with Fund staff on any information and data relevant for assessing performance that is not specifically defined in this memorandum.
- The authorities will share any prospective debt agreements relevant for program monitoring with Fund staff before submission to cabinet and before contracting.

### Selected reporting items and periodicity (examples drawn from Table 1)
- Central budget operations for revenues, expenditures and financing: Monthly, within six weeks of the end of each month.
- The stock and quarterly flows of buildup/clearance of GIFMIS payables: Quarterly, within six weeks of the end of each quarter.
- The stock of payables of the central government including consolidated payables prepared by CAGD: Quarterly, within six weeks of the end of each quarter.
- Detailed monthly inflation data including BoG’s various measures of core inflations, imported vs. locally produced good inflation, tradable and non-tradable good inflation: Monthly, within four weeks from the end of each month.
- Weekly gross international reserves and net international reserves: Weekly, within a week of the end of each week.
- Daily computations for the BoG local-currency interbank market rate, including all transactions used to derive it: Weekly, within a week of the end of each week.
- Daily BoG FX sales (amount and exchange rate of each transaction): Weekly, within a week of the end of each week.
- Detailed information on total contracted but not yet disbursed external project loans of official bilateral and commercial creditors pre-OCC cut-off date: Quarterly, within 30 days from the end of each quarter.
- Total debt stock of the central government, Daakye, ESLA, GIADEC, Cocobills, and central government-guaranteed debt by creditor: Monthly, within four weeks from the end of each month.
- Quarterly financial statements of main state-owned enterprises (listed): Quarterly, within three months of end of quarter.
- Petroleum pricing breakdowns and indicative maximum prices for individual petroleum products: Bi-weekly, within two days of the completion of the pricing review.

---

### Debt sustainability analysis (selected findings)

### Risk ratings and granularity
- Risk of external debt distress: High
- Overall risk of debt distress: High
- Granularity in the risk rating: Sustainable
- Application of judgment: No

### Key findings and medium-term outlook
- The authorities completed domestic debt restructuring last year and the restructuring of their Eurobonds in October.
- In June 2024, they reached agreement with the Official Creditor Committee (OCC) under the G20 Common Framework on a Memorandum of Understanding that codifies a debt treatment consistent with the IMF-supported program parameters.
- The DSA assumes a treatment of the residual claims of other external commercial creditors in line with the authorities’ restructuring strategy and comparability of treatment principles; those claims are deemed away for the purpose of the DSA.
- The Composite Indicator (CI) score is 2.74, which remains between the cut-off values for weak and strong debt-carrying capacity, 2.69 and 3.05, respectively.

### Projections and stress tests
- Ghana is at high risk of debt distress due to near-term breaches of the DSA thresholds, but is expected to reach moderate risk of debt distress in the medium term as all DSA sustainability targets will be met by 2028.
- By 2028, the DSA projects:
  - PV of total debt-to-GDP ratio will reach 55 percent.
  - External debt service-to-revenue ratio will reach 18 percent.
- Stress tests show that a combined contingent liability shock would put overall public debt well above the current trajectory throughout the full DSA horizon.
- Debt ratios are sensitive to commodity prices, exports, and combinations of shocks.

### Institutional support
- The authorities’ reform efforts are supported under the IMF’s ECF arrangement and the World Bank’s DPO series, with debt management reforms remaining an integral part of the reform package.

*Prepared by the staffs of the International Monetary Fund and the International Development Association; November 13, 2024.*

### 1.      The Debt Sustainability Analysis (DSA) covers public and publicly guaranteed (PPG) debt of

### 1ghaea2024004-print-pdf - 1.      The Debt Sustainability Analysis (DSA) covers public and publicly guaranteed (PPG) debt of

### Coverage of Debt and Liabilities
- The DSA covers public and publicly guaranteed (PPG) debt of the central government, with additional important liabilities of the public sector.
- The DSA includes:
  - explicitly guaranteed debt of other public and private sector entities including state-owned enterprises (SOEs); and
  - certain implicitly guaranteed SOEs debt, namely:
    - (a) Energy Sector Levy Act (ESLA) debt in the energy sector;
    - (b) Ghana Educational Trust Fund (GETFund/Daakye) debt for education infrastructure;
    - (c) debt related to the financing of infrastructure projects by Sinohydro; and
    - (d) gross debt of Cocobod.
- The DSA includes the stock of domestic arrears to suppliers estimated at 6.3 percent of GDP at end-2023.
- Local governments are not able to borrow and are therefore not included in the debt coverage.

### Financial Sector and Energy Sector Fiscal Costs
- Financial sector recapitalization fiscal cost:
  - estimated to have reached 7.1 percent of GDP over 2017-21;
  - additional recapitalization bonds issued in December 2023;
  - total amount of recapitalization included in the DSA baseline is still GHS 22 bn (equivalent to 2.6 percent of 2023 GDP).
- Energy sector budgetary transfers and arrears:
  - Government budgetary transfers to cover sector’s annual shortfalls averaged 1.7 percent of GDP between 2019 and 2021;
  - accumulated arrears to independent power producers (IPPs) and fuel suppliers of 2.8 percent of GDP at end-2023;
  - DSA baseline assumes government will continue to cover annual shortfalls with budget transfers going forward.

### Contingent Liabilities and Tailored Stress Tests
- Remaining potential contingent liabilities from the financial sector, SOEs and PPPs are modeled in tailored stress tests by adding to PPG debt:
  - (i) 2 percent of GDP in non-guaranteed SOE debt;
  - (ii) 5 percent of GDP stemming from further financial sector costs;
  - (iii) 2.4 percent of GDP, the equivalent to 35 percent of the outstanding public private partnership (PPP) arrangements.
- Note: The DSA perimeter includes Cocobod’s total gross debt due to its quasi-fiscal activities and extra-budgetary spending.

### Debt Classification and Nonresident Holdings
- Debt is classified based on residency of the creditor.
- Local-currency denominated domestic debt held by non-residents is included in external debt per LIC-DSF Guidance Note.
- Nonresident holdings of domestic debt decreased from $4.8 billion in 2021 (6.2 percent of GDP; 14.3 percent of public external debt) to $1.7 billion in 2023 (2.3 percent of GDP).

### Macroeconomic Shocks, Policy Response, and Restructuring
- Crisis drivers and policy response:
  - External shocks (COVID-19, tightening global financial conditions, geopolitical conflicts) and pre-existing vulnerabilities caused a deep economic and financial crisis.
  - Loss of international capital market access in late 2021 and increased difficulties rolling over domestic debt led to greater reliance on monetary financing by the Bank of Ghana and triggered an acute crisis.
  - Government requested IMF support in mid-2022 and launched public debt restructuring (domestic and external commercial and official bilateral) in December 2022.
- Fiscal deterioration and recent improvement:
  - Primary deficit on a commitment basis: more than 11 percent of GDP in 2020; 4.8 percent in 2021; 4.3 percent in 2022.
  - Rising interest payments to more than 7 percent of GDP.
  - Overall fiscal deficit: 12.0 percent of GDP in 2021; 11.8 percent in 2022.
  - Fiscal situation improved in 2023: primary deficit fell by 4 percentage points to 0.3 percent of GDP; overall budget deficit dropped to 3.6 percent.
  - On a cash basis, primary balance improved from a 9.0 percent of GDP deficit in 2020 to a 0.1 percent of GDP surplus in 2023.
- Public debt trends:
  - Public debt increased from 63 percent of GDP in 2019 to 92.7 percent of GDP at end-2022.
  - Domestic debt reached 49.7 percent of GDP in 2022, of which 16 percent of GDP was held by the Bank of Ghana.
  - Public external debt stood at 43 percent of GDP in 2022.
  - Debt stock decreased to 83 percent of GDP in 2023, mainly due to Domestic Debt Exchange and erosion of domestic debt stock by inflation.
- Liquidity and financing indicators:
  - Debt service-to-revenue ratio reached 127 percent in 2020; declined to 117.5 percent in 2022.
  - Before external debt service suspension (December 2022), debt-service to private external creditors accounted for 69 percent of external debt service payments in 2022; bilateral creditors accounted for 20 percent.
  - Gross financing needs (GFN) reached 19.5 percent of GDP in 2022 (market financing risks benchmark: 14 percent).
  - Gross financing need tensions eased in 2023 due to external debt service suspension.
- Borrowing costs and maturities:
  - Domestic debt increased from 24 percent of GDP in 2019 to 50 percent of GDP at end-2022.
  - Effective interest rate for government debt: 10.8 percent in 2021; 11 percent in 2022.
  - Average time to maturity of public debt: 8.2 years in 2021; 7.6 years in 2022.
  - Domestic debt service accounted for 81.7 percent of public debt service in 2022.
  - T-bill rates rose to close to 30 percent (consistent with BoG policy rate).
- Policy adjustments and reform agenda:
  - Authorities have accelerated fiscal consolidation, tightened monetary policy (including eliminating monetary financing), and limited foreign exchange interventions.
  - Reforms under Post COVID-19 Program for Economic Growth (PC-PEG) to underpin adjustment, build resilience, and boost growth.
  - Public debt management being strengthened with IMF and World Bank TA, including upgrading securities infrastructure and improved monitoring of SOE debt issuance.
  - IMF Extended Credit Facility (ECF) arrangement and World Bank DPO series support the policy package.
  - Authorities requested Fund TA for SOE oversight strategy; FAD’s SOE Health Check tool training delivered by AFRITAC West 2.

### Debt Restructuring Objectives and Status
- Objective:
  - Achieve debt sustainability and a moderate risk of debt distress under LIC-DSF by bringing PV of total debt-to-GDP and external debt service-to-revenue ratios down to 55 and 18 percent, respectively, by 2028.
- Status and milestones:
  - Domestic debt restructuring completed in 2023.
  - Standstill on external commercial and bilateral debt announced in late December 2022; formal request under G20 Common Framework in early 2023.
  - Agreement-in-principle (AIP) reached in January 2024 with the official creditor committee (OCC); MoU agreed in June 2024.
  - All but 4 countries have signed the MoU; remaining signatures expected in the coming weeks (from source text).
  - Bilateral agreements to be prepared by OCC co-chairs; all bilateral agreements expected to be signed by the end of June 2025.
  - Eurobond exchange finalized in October 2024.
  - With T-bills excluded from domestic restructuring perimeter and elimination of monetary financing since IMF-supported program approval in May 2023, government has relied mainly on short-term debt domestically; most debt service shifted to domestic debt.

### Macroeconomic Assumptions, Projections, and Risks
- DSA baseline:
  - Based on macroeconomic trajectory under the Fund-supported program to restore stability and debt sustainability, accounting for full debt restructuring.
  - Involves implementing fiscal adjustment, tightening monetary policy, enhancing exchange rate flexibility, and growth-enhancing structural reforms.
- Recent macro performance:
  - Real GDP growth: 5.1 percent in 2021; 2.9 percent in 2023.
  - Headline inflation: 54 percent in December 2022; declined to 22.1 percent at end-October 2024.
  - Gross international reserves: fell by about $6.5 billion in 2022 to US$1.4 billion at end-2022; recovered to US$5 billion (end-September 2024 – 2.1 months of imports).
- Baseline projections:
  - Non-extractive growth projected to strengthen to 5.0 percent by 2026 onwards.
  - Growth in extractive activities expected to increase to around 5.0 percent within five years.
  - Overall real GDP growth projected to pick up to 4 percent in 2024 and recover gradually to reach 5 percent in 2027.
  - Inflation projected to fall to the central bank’s target of 8 percent by end-2025.
  - Current account: expected at a one percent surplus in 2024; projected to remain in balance until 2026.
  - Official reserves projected to rise to 3 months of prospective imports (US$7.8 billion) by 2026.
- Structural reform measures cited to support medium-term growth:
  - Improve the business environment (including short term reforms to reduce minimum capital requirements for FDI and reform the Public Private Partnership Act);
  - Improve export competitiveness, promote entrepreneurship, strengthen public sector management, accelerate transition to the digital economy, and policies to adapt to climate change.

*Source: 1ghaea2024004-print-pdf - 1.      The Debt Sustainability Analysis (DSA) covers public and publicly guaranteed (PPG) debt of*

### 14.      Compared to the second review, changes to macroeconomic assumptions are driven by the

### Compared to the second review, changes to macroeconomic assumptions are driven by the external sector.

### Macroeconomic assumptions and recent revisions
- 2024 inflation was revised up from 15 to 18 percent, given a slower-than-projected decline until end-September, with a similar increase in the GDP deflator.
- Nominal GDP in USD terms was revised down noticeably in 2024 despite a higher deflator, given a large nominal exchange rate depreciation.
- 2024 export growth was raised noticeably, as very large gold exports outweigh the underperforming cocoa sector; medium-term projections are comparable to the second review.
- 2024 imports are expected to grow at a faster pace in 2024, taking into account preliminary H1 data and larger externally-financed public capital spending.
- Average interest rates on external debt declined noticeably as a direct consequence of the debt restructuring, with reduced amounts of external debt and lower rates.

### Fiscal consolidation, DSA baseline, and fiscal anchors
- The DSA’s baseline scenario assumes a large and frontloaded, yet feasible, fiscal adjustment by the central government and accounts for Cocobod’s net income.
- Central government primary balance (commitment basis), the key fiscal anchor under the proposed IMF-supported program:
  - Would improve by 5.9 percent of GDP between 2022 and 2026.
  - To reach a surplus of 1.5 percent of GDP in 2025, which should be maintained at least until 2028.
- 2023 outcomes and measures:
  - Authorities achieved a primary balance of -0.3 percent of GDP in 2023 (some 4 percentage points adjustment compared to 2022).
  - Adjustment underpinned by permanent non-oil revenue measures of some 1 percent of GDP and expenditure streamlining.
- 2024 projections and measures:
  - 2024 primary balance (commitment basis) expected to further improve by 0.8 percentage points, to a surplus of 0.5 percent of GDP, underpinned by new revenue measures.
  - Announced revenue measures aim to permanently improve the non-oil revenue-to-GDP ratio by 0.9 percent of GDP.
  - Measures included streamlining large VAT exemptions, strengthening excise taxes, and reforms to reinforce tax compliance and revenue administration.
  - Although VAT on electricity exemption streamlining was not implemented, alternative measures (primarily strengthening tax administration on foreign income of Ghanian residents) are estimated to have similar yield.
  - End-June data confirm improved revenue and deficit outcomes.
- Medium-term revenue objective and actions:
  - Authorities’ objective to raise government revenue-to-GDP ratio to over 18 percent by the end of the program, from 15.7 percent in 2022.
  - 2023 Medium Term Revenue Strategy remains main anchor; key measures focus on reducing tax expenditures and strengthening tax compliance.
  - Expenditure streamlining required, while preserving growth-enhancing public investment and expanding social safety nets.
  - Plan prepared to clear large stock of domestic arrears as part of Arrears’ Clearance and Prevention Strategy (structural benchmark at end-June 2023).

### Debt restructuring implemented and terms
- The DSA baseline includes the authorities’ comprehensive debt restructuring, fully implemented for 95 percent of claims at end-October.
- Domestic Debt Exchange Program (DDEP):
  - Launched early-December 2022, voluntary swaps of medium- and long-term domestic bonds for lower-coupon and longer maturity bonds.
  - First stage completed in February; second phase finalized in fall of 2023, including Cocobills, US$-denominated domestic debt, and pension fund holdings; BoG’s non-marketable debt restructured while ensuring central bank solvency.
- Bilateral external debt (OCC/G20 Common Framework):
  - Agreed debt treatment provides full debt service relief over the program period from all bilateral claims committed and disbursed before December 2022.
  - Rescheduled debt service capitalized and accrues an additional interest rate until repayment in years 16 and 17 after the original due date.
  - Disbursements of pre-CoD projects made after December 2022 will not be restructured; authorities and OCC creditors committed to limit such disbursements (including commercial) to US$250 million per year from 2024 to 2026.
- Eurobond restructuring:
  - Successfully implemented in October 2024.
  - Most bondholders received new bonds maturing in 2029 and 2035, with a nominal haircut of 37 percent and a coupon rate increasing from 5 to 6 percent in 2028.
  - Some bondholders chose longer-term bonds maturing in 2037, with no haircut but paying a coupon rate of 1.5 percent.
  - All bondholders received a downpayment bond maturing in 2026 and a post-default interest bond maturing in 2030.
- Restructuring of other commercial claims:
  - Authorities making good faith efforts under IMF Lending into Arrears policy to reach agreements with residual external commercial creditors on terms consistent with program parameters and comparability of treatment.
  - Outstanding debt stock to residual external creditors is US$2.7 billion, which amounts to less than 5 percent of pre-restructuring total public debt.
  - Authorities launched formal negotiations with these creditors, sent official letters to largest creditors, and intend to start negotiations with smaller commercial creditors and create coordination mechanisms.

### External and domestic financing assumptions under the baseline
- New external borrowing constrained under the IMF program:
  - New external borrowing under the program restricted to a PV of US$231.5 million and US$50 million in 2024 and 2025, respectively.
- Multilateral and bilateral projected disbursements (2023-26):
  - World Bank assumed to disburse about US$3.4 billion between 2023 and 2026:
    - About US$1.15 billion for budget support loans.
    - US$369 million for other projects contributing to program financing.
    - US$1.85 billion for project support.
  - AfDB assumed to disburse US$343 million, of which US$240 million of project loans and grants over 2023-26 and US$104 for budget support over first two years of the program.
  - Scenario assumes disbursements of US$3 billion from the IMF in 2023-26.
  - Other bilateral development partners expected to contribute US$853 million from 2024-26, restricted by limits on pre-COD disbursements.
  - Commercial debt of about US$550 million in 2026 expected to fill residual external financing needs.
- Domestic financing:
  - Government issued large amounts of T-bills in 2023-24 as bond market was closed; demand strong, particularly from non-bank investors.
  - About 72 percent of 2024 gross financing needs are met by domestic issuances, with similar ratios until end of program.
  - Starting in 2025, baseline assumes resumption of medium and long-term domestic debt issuance per authorities’ debt management strategy.
  - Effective real interest rate assumed to remain above 5 percent; nominal interest rates expected to decline with inflation returning to its target.
  - Overall net issuance of domestic debt expected to be slightly negative in coming years.
  - Domestic debt service as share of revenue will remain elevated compared to average in other LICs but will be gradually reduced.

### Projections realism, historical gaps, and stresses
- Historical projection shortfalls:
  - Compared to the five-year projection in the 2019 DSA, total public debt exceeded estimates by 30.6 percentage points of GDP between 2019 and 2023 due to higher-than-expected fiscal deficits and other factors.
  - The average five-year gap between actual and projected overall debt growth remains at 13 percentage points of GDP despite a noticeable 2023 public debt reduction.
  - External debt exceeded the 2019-DSA 5-year projections by 14.7 percentage points of GDP due mainly to higher-than-expected external borrowing costs and currency depreciation.
- Feasibility of baseline consolidation:
  - Baseline’s projected primary balance adjustment of 5.9 percent of GDP over three years is assessed as feasible.
  - Under the program, projections assume achievement of a primary balance surplus of 1.5 percent of GDP by 2025 on a commitment basis and maintenance over the medium term.
  - Consolidation falls within the top quartile for peers’ consolidation distribution, but remains much lower than the top of the distribution, supporting realism.
  - Authorities met performance criteria on targeted primary balance for June 2024 through revenue and expenditure measures (VAT rate increase, elimination of customs discounts, levy increase, wage bill restraint, reduction of capital expenditures, lower cap on transfers to statutory funds, upfront energy tariff adjustment).
- Downside risks:
  - Baseline contingent on successful program implementation, full execution of external debt restructuring, and adequate financing from development partners.
  - Risks from delays in adjustment/reforms, delays in external debt relief, weak interagency coordination, lower agricultural and commodity production, and deterioration in global conditions.
  - Domestic debt restructuring presents significant risks to domestic financial sector stability.
  - Continued uncertainty on exchange rate path, large domestic financing needs, and still high inflation despite tightening are domestic vulnerabilities.
  - Policy slippages, election-related overspending risks in 2024, recent dry spell affecting northern agriculture (led to higher inflation), need for higher support to energy sector and Cocobod, and larger-than-expected financial sector support could adversely affect debt dynamics.
  - Strong political support for the program is an important mitigating factor; opposition has communicated broad support, lowering risk of program discontinuation.

### Climate vulnerability and related policy measures
- Ghana highly vulnerable to climate variability and change, posing significant risks such as flooding and droughts.
- Country climate-related policies and strategies include:
  - National Climate Change Adaptation Strategy.
  - Low Carbon Development Strategy.
  - National Climate Change Master Plan.
- Ghana 2022 Country Climate and Development Report (CCDR) recommendations include integrated agriculture and environmental management, building sustainable cities and resilient infrastructure, boosting disaster risk preparedness, managing forest resources, transitioning to clean energy, modernizing transport systems, strategizing for climate resilience financing, and implementing adaptive health systems.
- World Bank-supported projects cited:
  - Greater Accra Resilient and Integrated Development Project (improve flood risk management and solid waste management in Odaw River Basin).
  - Greater Accra Urban Resilience and Integrated Development Project (improvements to drainage systems and flood water management).

*Source: IMF staff report excerpt (Text on macroeconomic assumptions, fiscal plans, debt restructuring, financing, projections realism, risks, and climate-related policies).*

### 25.      Ghana’s debt carrying capacity is assessed as “medium”, unchanged from the last DSA.

### Ghana’s debt carrying capacity is assessed as “medium”, unchanged from the last DSA.

### Debt-carrying capacity assessment
- Composite Indicator (CI) score: 2.74.
- CI cut-off values: weak = 2.69; strong = 3.05. The CI score of 2.74 lies between these cut-offs, indicating a "medium" debt-carrying capacity.
- CI composition: the CI is the weighted average of the 10-year average of the World Bank’s Country Policy and Institutional Assessment (CPIA) score and macro-economic variables from the April 2024 WEO vintage.

- CI score components (as presented):
  - CPIA coefficient: 0.385; 10-year average value: 3.446; contribution (A*B): 1.3348 (48% contribution).
  - Real growth rate (in percent) coefficient: 2.719; 10-year average: 3.954; contribution: 0.114% (listed as 14% contribution in table).
  - Import coverage of reserves (in percent) coefficient: 4.052; 10-year average: 27.069; contribution: 1.104 (40% contribution).
  - Import coverage of reserves^2 (in percent) coefficient: -3.990; 10-year average: 7.327; contribution: -0.29 (-11% contribution).
  - Remittances (in percent) coefficient: 2.022; 10-year average: 5.341; contribution: 0.114%.
  - World economic growth (in percent) coefficient: 13.520; 10-year average: 2.909; contribution: 0.391 (14% contribution).
  - Reported overall CI Score: 2.740 (100%); CI rating: Medium.

### Stress tests and shock design
- Standard shock calibration:
  - GDP growth, primary balance, exports, and FDI: shocks calibrated at 1 standard deviation in 2025 from their respective historical averages.
  - Exchange rate: one-time 30 percent depreciation in 2025.
  - A combined shock including all the above at half magnitude is also applied.
- Tailored stress tests:
  - Commodity-price test: one standard deviation drop in both fuel and non-fuel commodity export prices; interactions with other macroeconomic variables; rationale: commodities represent over 80 percent of exports.
  - Contingent liabilities stock test: contingent liability shock has 2 components:
    - (i) minimum starting value of 5 percent of GDP; and
    - (ii) tailored component encompassing contingent liabilities from the financial market (5 percent of GDP), PPPs (2.4 percent of GDP) and other SOEs debt not captured by debt coverage (2 percent of GDP).
  - Market financing shock: simulates a 400bps increase in the cost of borrowing for 3 years, shortening of average maturities on external debt by 2 years, and a 15 percent exchange rate depreciation.
- Note on financing of shock-generated needs: all additional financing needs generated by the shocks under the stress tests are assumed to be covered by PPG external MLT debt in the external DSA; default terms of marginal debt are based on baseline 10-year projections.

### External DSA assessment (key findings)
- Baseline outcome:
  - All external debt burden indicators fall durably below or to their respective thresholds by 2028.
  - Debt-service-to-revenue ratio remains at or slightly below 18 percent until 2035.
  - PV of PPG external debt-to-GDP, debt service-to-exports ratio, and PV of external debt-to-exports ratio remain below their respective thresholds in the baseline.
- Shock outcomes:
  - A combination of shocks leads to a breach in the PV of external debt-to-GDP ratio over the medium term.
  - A shock to exports has the largest negative impact on PV of debt-to-exports, debt service-to-exports, and debt service-to-revenue ratios — leading to breaches in the latter two indicators’ thresholds.
  - The PV of external debt-to-exports ratio does not breach its 180 percent threshold under any shock scenario.
- Assumption for interest rate on additional borrowing resulting from stress tests: estimated at 9 percent (higher than the default rate of 4.9 percent) to reflect deterioration in Ghana’s creditworthiness and loss of market access.

### Public DSA assessment (key findings)
- Baseline outcome:
  - PV of total PPG debt-to-GDP is expected to fall durably below its 55 percent benchmark by 2028.
- Shock outcomes:
  - Contingent liability shock has the most severe impact on PV of debt-to-GDP ratio, causing a breach of the 55 percent benchmark over the entire forecast horizon.
  - Commodity price shock impacts the debt service-to-revenue and the PV of debt-to-revenue ratios most strongly.
- Market financing risk assessment:
  - Despite loss of market access, market financing risks are assessed as "moderate".
  - Maximum gross financing need over the 3-year baseline projection horizon: 11 percent (does not breach the 14 percent of GDP benchmark).
  - Gross financing needs projected to decline to below 10 percent by 2032.
  - Eurobond spreads: declined drastically in October, from around 2,000 to below 700 within a few days, but remain above the 570-bps benchmark; continued lack of market access persists.

### Sustainability assessment and medium-term outlook
- Near-term and medium-term risk:
  - Ghana is at high risk of distress due to near-term breaches of DSA thresholds.
  - Expected to reach moderate risk of debt distress in the medium term as all DSA sustainability targets will be met by 2028; debt assessed as sustainable on a forward-looking basis assuming external debt restructuring is completed in line with program parameters.
- Treatment of residual arrears:
  - Residual arrears with other commercial non-bonded creditors, given their limited size (less than 5 percent), can be considered treated on comparable terms and deemed away for the purpose of the risk rating (in line with LIC DSF Guidance Note).
- Baseline program assumptions for achieving moderate risk:
  - Strong program ownership and full commitment to the Fund-supported program.
  - Reduce PV of total debt-to-GDP to 55 percent and external debt service-to-revenue to 18 percent by 2028.
  - Measures include revenue-based fiscal consolidation, higher spending efficiency, stronger social safety nets, structural reforms for greater exchange rate flexibility, a more diversified economy, and stronger growth.

### Policy implications and recommendations
- Fiscal policy:
  - Maintain fiscal restraint to avoid breaches—contingent liabilities pose the largest downside risk to PV of debt-to-GDP.
  - Pursue revenue-based fiscal consolidation with higher spending efficiency and stronger social safety nets to meet targets by 2028.
- Structural reforms:
  - Support greater exchange rate flexibility.
  - Promote economic diversification and stronger growth to improve debt dynamics.
- Debt transparency and data:
  - Enhance debt data and transparency to better identify PPG debt and contingent liabilities for more accurate assessment of debt vulnerabilities.
  - Improve comprehensive coverage of SOE debt and guarantees—particularly those engaging in quasi-fiscal activities—to allow more accurate fiscal risk assessment and enhance debt coverage.
- Restructuring and creditor engagement:
  - Continue good faith negotiations with residual external private creditors for treatment in line with program parameters; successful external debt restructuring is central to the forward-looking sustainability assessment.

### Authorities’ views
- The authorities generally shared staff’s assessment of debt sustainability.
- The authorities renewed their commitment to continue strong implementation of the IMF-supported program and the restructuring of external debt to restore debt sustainability.
- The authorities acknowledged the importance of successfully implementing the reform agenda underpinned by the IMF-supported program to restore economic stability.

*Source: IMF staff assessment as presented in the Ghana DSA chapter.*

### 1990. The size of 3-year adjustment from program inception is found on the horizontal axis; the percent

### 1ghaea2024004-print-pdf - 1990. The size of 3-year adjustment from program inception is found on the horizontal axis; the percent

### Fiscal adjustment and possible growth paths
- Charted metric: 3-Year Adjustment in Primary Balance (Percentage points of GDP).
- Distribution note: 3-year PB adjustment greater than 2.5 percentage points of GDP is described as "in approx. top quartile."
- Projection scenarios shown with multipliers: Multiplier = 0.2, Multiplier = 0.4, Multiplier = 0.6, Multiplier = 0.8.
- Time series noted across 2018–2025 in percentage points of GDP.

### Market-financing risk indicators (Figure 5)
- Note: "Both the baseline and market financing shock scenarios display very similar paths for PV of debt-to-exports, debt service-to-exports and debt service-to-revenue ratios due to the low level of new envisaged commercial borrowing in the 3 years from the second year of the projection (2024-26)."
- Time horizon in charts extends through 2029 for selected indicators.

### Indicators of domestic public debt, 2019–2033 (Figure 6)
- Sources: Country authorities; and staff estimates and projections.
- Footnote 1/: "Net domestic debt issuance is an estimate based on the calculated public gross financing need net of gross external financing, drawdown of assets, other adjustments, and domestic debt amortization. It excludes short-term debt that was issued and matured within the calendar year."

### External Debt Sustainability Framework, Baseline Scenario, 2023–44 (Table 1) — key series and levels
- External debt (nominal): 50.0 (2023); 50.7 (2024); 48.6 (2025); 45.3 (2026); 43.0 (2027); 41.0 (2028); 39.1 (2029); 32.8 (2034); 24.8 (2044).
- Of which: public and publicly guaranteed (PPG): 44.4 (2023); 44.5 (2024); 42.2 (2025); 39.1 (2026); 37.0 (2027); 35.1 (2028); 33.4 (2029); 27.6 (2034); 20.4 (2044).
- Change in external debt: 1.6 (2023); 0.7 (2024); -2.1 (2025); -3.3 (2026); -2.3 (2027); -2.0 (2028); -1.9 (2029); -1.0 (2034); -0.5 (2044).
- Identified net debt-creating flows: -2.4 (2023); -5.3 (2024); -4.8 (2025); -5.0 (2026); -4.8 (2027); -4.6 (2028); -4.3 (2029); -1.0 (2034); -1.2 (2044).
- Non-interest current account deficit: 0.9 (2023); -2.0 (2024); -1.1 (2025); -1.1 (2026); -1.0 (2027); -0.8 (2028); -0.7 (2029); 0.0 (2034); -0.1 (2044).
- Deficit in balance of goods and services: 2.2 (2023); 0.9 (2024); 1.3 (2025); 0.6 (2026); 0.4 (2027); 0.4 (2028); 0.3 (2029); 0.1 (2034); 0.9 (2044).
- Exports: 31.9 (2023); 36.9 (2024); 37.0 (2025); 36.1 (2026); 35.1 (2027); 34.2 (2028); 33.4 (2029); 29.3 (2034); 21.7 (2044).
- Imports: 34.1 (2023); 37.8 (2024); 38.3 (2025); 36.7 (2026); 35.5 (2027); 34.6 (2028); 33.8 (2029); 29.4 (2034); 22.5 (2044).
- Net current transfers (negative = inflow): -5.4 (2023); -6.8 (2024); -6.7 (2025); -6.2 (2026); -5.8 (2027); -5.6 (2028); -5.5 (2029); -4.9 (2034); -4.1 (2044).
- Net FDI (negative = inflow): -1.7 (2023); -2.2 (2024); -2.6 (2025); -2.8 (2026); -2.9 (2027); -3.0 (2028); -3.0 (2029); -1.0 (2034); -1.2 (2044).
- Endogenous debt dynamics (contribution): -1.7 (2023); -1.1 (2024); -1.1 (2025); -1.1 (2026); -0.9 (2027); -0.8 (2028); -0.6 (2029); 0.0 (2034); 0.1 (2044).
  - Contribution from nominal interest rate: 0.4 (2023); 0.9 (2024); 1.1 (2025); 1.1 (2026); 1.2 (2027); 1.2 (2028); 1.3 (2029); 1.5 (2034); 1.3 (2044).
  - Contribution from real GDP growth: -1.4 (2023); -2.1 (2024); -2.2 (2025); -2.2 (2026); -2.1 (2027); -2.0 (2028); -1.9 (2029); -1.6 (2034); -1.2 (2044).
- Residual 3/: 4.0 (2023); 6.0 (2024); 2.6 (2025); 1.6 (2026); 2.5 (2027); 2.6 (2028); 2.5 (2029); 0.0 (2034); 0.7 (2044).
- Sustainability indicators:
  - PV of PPG external debt-to-GDP ratio: 29.6 (2023); 32.9 (2024); 33.8 (2025); 31.7 (2026); 30.2 (2027); 29.0 (2028); 27.8 (2029); 24.4 (2034); 19.0 (2044).
  - PV of PPG external debt-to-exports ratio: 92.7 (2023); 89.1 (2024); 91.3 (2025); 87.8 (2026); 86.0 (2027); 84.8 (2028); 83.1 (2029); 83.2 (2034); 87.7 (2044).
  - PPG debt service-to-exports ratio: 1.7 (2023); 4.3 (2024); 5.9 (2025); 8.6 (2026); 9.4 (2027); 9.4 (2028); 9.6 (2029); 10.9 (2034); 10.3 (2044).
  - PPG debt service-to-revenue ratio: 3.5 (2023); 9.2 (2024); 12.5 (2025); 17.1 (2026); 18.3 (2027); 18.0 (2028); 18.0 (2029); 17.9 (2034); 12.6 (2044).
- Gross external financing need (Million of U.S. dollars): 867.4 (2023); -748.2 (2024); 79.3 (2025); 701.2 (2026); 966.2 (2027); 1131.1 (2028); 1294.1 (2029); 6050.7 (2034); 2611.6 (2044).

### Key macroeconomic assumptions (Table 1)
- Real GDP growth (in percent): 2.9 (2023); 4.0 (2024); 4.4 (2025); 4.9 (2026); 5.0 (2027); 5.0 (2028); 5.0 (2029); 5.0 (2034); 5.0 (2044); 4.2 (historical average); 4.8 (projection average).
- GDP deflator in US dollar terms (change in percent): 0.4 (2023); -8.4 (2024); -1.9 (2025); 3.9 (2026); 2.9 (2027); 1.8 (2028); 1.8 (2029); 1.8 (2034); 1.9 (2044); -1.7 (hist. avg); 0.9 (proj. avg).
- Effective interest rate (percent) 4/: 0.9 (2023); 1.8 (2024); 2.2 (2025); 2.5 (2026); 2.8 (2027); 3.0 (2028); 3.4 (2029); 4.9 (2034); 5.4 (2044); 5.4 (hist. avg); 3.3 (proj. avg).
- Growth of exports of G&S (US dollar terms, in percent): -4.7 (2023); 10.2 (2024); 2.6 (2025); 6.4 (2026); 5.2 (2027); 4.1 (2028); 4.4 (2029); 3.4 (2034); 4.3 (2044); 4.6 (hist. avg); 4.9 (proj. avg).
- Growth of imports of G&S (US dollar terms, in percent): -1.2 (2023); 5.6 (2024); 3.7 (2025); 4.5 (2026); 4.6 (2027); 4.3 (2028); 4.1 (2029); 3.7 (2034); 4.8 (2044); 1.8 (hist. avg); 4.3 (proj. avg).
- Government revenues (excluding grants, in percent of GDP): 15.8 (2023); 17.1 (2024); 17.3 (2025); 18.1 (2026); 18.0 (2027); 17.9 (2028); 17.8 (2029); 17.8 (2034); 17.8 (2044); 14.0 (hist. avg); 17.8 (proj. avg).
- Aid flows (in Million of US dollars) 5/: 219.6 (2023); 1118.5 (2024); 1248.4 (2025); 887.4 (2026); 860.3 (2027); 900.5 (2028); 943.4 (2029); 759.4 (2034); 1052.6 (2044).
- Memorandum items:
  - Nominal GDP (Million of US dollars): 76,363 (2023); 72,734 (2024); 74,511 (2025); 81,208 (2026); 87,747 (2027); 93,830 (2028); 100,252 (2029); 276,030 (2034).
  - Nominal dollar GDP growth: 3.3 (2023); -4.8 (2024); 2.4 (2025); 9.0 (2026); 8.1 (2027); 6.9 (2028); 6.8 (2029); 6.9 (2034); 7.0 (2044); 2.4 (hist. avg); 5.8 (proj. avg).

### Debt stock and service memoranda (Table 1)
- PV of external debt (percent of GDP): 35.2 (2023); 39.1 (2024); 40.1 (2025); 37.8 (2026); 36.2 (2027); 34.9 (2028); 33.6 (2029); 29.6 (2034); 23.3 (2044).
- PV of external debt (in percent of exports): 110.4 (2023); 106.0 (2024); 108.5 (2025); 104.8 (2026); 103.0 (2027); 101.9 (2028); 100.3 (2029); 101.1 (2034); 107.8 (2044).
- Total external debt service-to-exports ratio: 6.0 (2023); 8.4 (2024); 10.3 (2025); 13.2 (2026); 14.2 (2027); 14.5 (2028); 15.0 (2029); 17.9 (2034); 10.3 (2044).
- PV of PPG external debt (in Million of US dollars): 22582.8 (2023); 23930.5 (2024); 25152.7 (2025); 25731.3 (2026); 26516.8 (2027); 27225.2 (2028); 27869.2 (2029); 34297.1 (2034); 52431.8 (2044).
- (PVt-PVt-1)/GDPt-1 (in percent): 1.8 (2023); 1.7 (2024); 0.8 (2025); 1.0 (2026); 0.8 (2027); 0.7 (2028); 1.1 (2029); 1.0 (2034).

### Grant and concessional financing indicators (Table 1)
- Grant element of new public sector borrowing (in percent): 31.8 (2024); 28.2 (2025); 18.4 (2026); 10.0 (2027); 10.5 (2028); 10.6 (2029); 4.7 (2034); 3.8 (2044).
- Grant-equivalent financing (in percent of GDP): 1.4 (2024); 1.1 (2025); 0.7 (2026); 0.5 (2027); 0.5 (2028); 0.5 (2029); 0.4 (2034); 0.3 (2044).
- Grant-equivalent financing (in percent of external financing): 37.2 (2024); 33.0 (2025); 24.5 (2026); 16.2 (2027); 16.9 (2028); 17.3 (2029); 11.2 (2034); 13.6 (2044).

### Sensitivity analysis for key indicators of PPG external debt, 2024–34 (Table 3) — selected highlights
- Baseline PV of PPG external debt-to-GDP ratio: 32.9 (2024); 33.8 (2025); 31.7 (2026); 30.2 (2027); 29.0 (2028); 27.8 (2029); 26.5 (2030); 26.0 (2031); 25.4 (2032); 24.9 (2033); 24.4 (2034).
- A1. Key variables at their historical averages in 2024-2034: 32.9 (2024); 34.7 (2025); 35.8 (2026); 37.2 (2027); 38.5 (2028); 39.8 (2029); 40.4 (2030); 40.6 (2031); 40.5 (2032); 40.1 (2033); 39.2 (2034).
- Bound tests and tailored tests provided for PV-to-exports, debt service-to-exports, and debt service-to-revenue ratios with thresholds indicated (e.g., threshold 40.0 for PV-to-GDP, threshold 180.0 for PV-to-exports, threshold 15.0 for debt service-to-exports, threshold 18.0 for debt service-to-revenue).
- Example baseline debt service-to-exports ratio: 4.3 (2024); 5.9 (2025); 8.6 (2026); 9.4 (2027); 9.4 (2028); 9.6 (2029); 10.0 (2030); 10.3 (2031); 10.6 (2032); 10.6 (2033); 10.9 (2034).

### Sensitivity analysis for key indicators of public debt, 2024–34 (Table 4) — selected highlights
- Baseline PV of Debt-to-GDP ratio (public): 70.0 (2024); 64.7 (2025); 60.5 (2026); 57.0 (2027); 54.1 (2028); 52.1 (2029); 50.3 (2030); 48.7 (2031); 47.2 (2032); 45.9 (2033); 44.7 (2034).
- TOTAL public debt benchmark: 55.0 (all years shown).
- Baseline debt service-to-revenue ratio: 59.2 (2024); 71.7 (2025); 71.3 (2026); 71.0 (2027); 72.4 (2028); 62.6 (2029); 61.2 (2030); 62.1 (2031); 60.8 (2032); 60.1 (2033); 58.5 (2034).
- Tailored and bound tests reported; bold values indicate a breach of the benchmark.

### Statement by Mr. Mohammed El Qorchi, Alternate Executive Director for Ghana; Mr. Nana Akosah, Advisor to the Executive Director (December 2, 2024) — key points
- Opening: Authorities express gratitude to the Executive Board, management, and staff; note productive engagements during the third review of the Extended Credit Facility (ECF) program.
- Program performance: "All end-June 2024 targets and prior actions were met, along with five out of seven structural benchmarks (SBs) due between June and end-October 2024."
  - One SB (new methodology for the cedi reference rate) met with a delay.
  - Remaining SB (updating the taxpayer registry) to be completed "in the next few weeks."
  - Authorities "remain committed to achieving program objectives despite the challenges ahead of the December 2024 general elections and throughout the political transition."
- Recent economic developments and outlook:
  - "Economic activity is rebounding faster than expected in 2024, primarily driven by strong performances in mining, construction, and information and communication."
  - Authorities agree with staff revision of real GDP growth to 4 percent for 2024 (up from 3.1 percent at the 2nd ECF review).
  - Medium-term potential growth expected "around 5 percent."
  - Inflation: "declined to 22.1 percent by end-October 2024 (down from 23.5 percent in January 2024 and a peak of 54.1 percent in December 2022) and is expected to reach 18 percent by year-end."
    - This end-year figure is "within the outer bounds of the monetary policy consultation clause (MPCC)."
    - Projection: inflation "is projected to fall within the Bank of Ghana’s (BoG’s) medium-term target of 8±2 percent by end-2025, assuming continued tight fiscal and monetary policies."
  - External sector: "improved remarkably in 2024 due to increased remittances and robust gold and oil exports."
  - Gross international reserves: "had recovered to cover 2.3 months of import by end-August 2024 (up from 1.7 months by end-December 2023), and the authorities aim to rebuild reserves to cover at least 3 months of imports by the end of the ECF program."
- Risks and policy commitment:
  - Authorities "recognise the significant downside risks to the outlook" and commit to implementing sound macro-fiscal policies and reforms under the post-Covid-19 Program for Economic Growth (PC-PEG).
  - Policy objectives: strengthen macroeconomic gains, restore medium-term fiscal and debt sustainability, foster durable inclusive growth, and reduce poverty.

*Source: IMF staff estimates, projections, figures, tables, and Ghana authorities' statement as presented in the supplied content.*

### 5.      Fiscal discipline remains the authorities’ top priority at this crucial time. The

### 5.      Fiscal discipline remains the authorities’ top priority at this crucial time. The

### Fiscal consolidation and revenue mobilization
- Authorities committed to an ambitious, multi-year revenue-based fiscal consolidation with enhanced spending efficiency to restore fiscal sustainability.
- End-June 2024 data shows improved revenue and deficits outcomes; authorities are on track to achieve their fiscal objectives under the approved 2024 Budget.
- Numerical targets and commitments:
  - Permanently increase non-oil revenue-to-GDP by 0.6 percent.
  - Achieve an overall revenue-to-GDP ratio above 18 percent by 2026, up from 15.7 percent in 2022.
- Policy measures under the Medium-Term Revenue Strategy (MTRS):
  - Strengthen tax administration and tax compliance.
  - Reduce tax expenditures.
  - Promote equity and transparency while providing tax certainty and predictability for businesses and individuals.
  - Preparedness to implement contingency measures, including frontloading some actions in the MTRS.

### Expenditure rationalization and energy sector measures
- Continued rationalization of expenditure with focus on growth-enhancing capital projects.
- Commitment to curtail low-priority spending and ensure strict adherence to budgetary appropriations to prevent election-cycle slippages.
- Operational readiness to adjust or reprioritize Ministries, Departments and Agencies’ budget allotments to address overspending and/or the materialization of fiscal risks.
- Energy sector actions:
  - Maintain quarterly electricity tariff adjustment.
  - Strict enforcement of the revised guidelines of the cash waterfall mechanism.
  - Conduct a validation audit for 2023 energy sector legacy debt.
  - Strengthen the Ministry of Finance’s oversight of the energy sector to mitigate related fiscal risks.

### Social protection and safety nets
- Maintain focus on social protection programs to better support the most vulnerable and foster an inclusive recovery.
- Increased allocations for highly targeted social intervention programs in the 2024 Budget; authorities committed to achieving them.
- Plans to further expand and improve the efficiency of social safety nets.
- Commitment to launch a review of all government flagship programs by end-March 2025 to identify efficiency gains and better support the most vulnerable.
- Provision of emergency support, including cash transfers with World Bank assistance, while ensuring additional spending stays within the 2024 Appropriation’s ceilings.

### Debt sustainability, debt management, and restructuring
- Restore medium-term debt sustainability through strengthened debt and cash management frameworks.
- Priorities and limits:
  - Prioritize concessional financing for projects.
  - Give precedence to IPP arrears payments.
  - Maintain hard limits on newly contracted non-concessional external debt.
- Planned publications and reforms by end of June 2025:
  - Revised medium-term debt management strategy.
  - Annual borrowing and recovery plan.
  - Relevant quarterly issuance calendars.
- Upgrading securities operation infrastructure and integrating all state institutions involved in contracting and servicing public debt; digitalizing processes to accelerate debt service processing, improve accuracy of debt recording and accounting, and enhance debt transparency.
- Debt restructuring progress:
  - Domestic debt restructuring completed in 2023.
  - Agreement reached with official bilateral creditors under the G20 Common Framework on a Memorandum of Understanding detailing bilateral debt restructuring terms.
  - Planned Eurobond exchange concluded in October 2024.
  - Commitment to advance good-faith negotiations with other external commercial creditors to reach a timely and mutual agreement on the remaining debt restructuring (which is less than 5 percent of pre-restructuring public debt), while ensuring comparability of treatment.
  - Letters already sent to the largest other commercial creditors to start formal negotiations.

### Monetary policy, financial sector stability, and exchange rate
- Maintain a tight and data-driven monetary policy to anchor inflation toward its 8±2 percent target, as envisaged under the MPCC.
- Avoid monetary financing of the budget and improve the monetary policy framework, including reviewing the tiered reserve requirement.
- Ensure BoG’s financial and operational autonomy, including recapitalization, per the 2023 safeguard assessments.
  - Cabinet’s approved amendments to the Bank of Ghana Act of 2002 (Act 612) aimed at strengthening BoG’s autonomy will be submitted to Parliament by March 2025.
- Enhance exchange rate flexibility to boost reserve accumulation and build resilience to external shocks:
  - Adopted a more robust FX reference rate computation method that ensures a unified FX market.
  - Avoid policies that create multiple currency practices.
- Financial sector stability measures:
  - Ensure swift and orderly completion of banks’ recapitalization; strengthen risk-based supervision for banks with capital shortfalls, including imposing appropriate sanctions for noncompliance.
  - Operationalize the Ghana Financial Sector Fund and prioritize solvency support for state-owned banks (SoBs), while enhancing SoBs’ governance, operational efficiency, and risk management.
  - Implement a credible, comprehensive, and cost-effective strategy to tackle NIB’s financial and operational challenges.
  - Expand SME credit through qualifying participating financial institutions, with support from the Development Bank Ghana and external development partners.
  - Continue improving the AML/CFT framework to maintain alignment with FATF international standards.

### Structural reforms, governance, and public financial management
- Advance structural reforms to strengthen governance, boost private sector participation, and foster durable and inclusive growth.
- Growth strategy priorities: enhance human capital development, reduce poverty and gender inequalities, boost financial inclusion, and support strong, sustainable, and inclusive growth.
- Public financial management reforms:
  - Enhance SOE governance and efficiency, particularly in the energy and cocoa sectors.
  - Improve fiscal framework and institutions.
  - Address procurement flaws by leveraging digitalization to entrench discipline, strengthen controls, ease budget rigidities, prevent arrears accumulation and bolster transparency.
  - Amendments to the 2018 Fiscal Responsibility Act aimed at strengthening fiscal discipline have been submitted to parliament.
  - Requested IMF technical assistance (TA) to develop an effective SOE oversight strategy and to receive training using FAD’s SOE Health Check tool.
- Anti-corruption efforts:
  - Continue to strengthen the anti-corruption framework to create a more favorable business environment for investment and unlock Ghana’s growth potential.
  - Commit to publishing the IMF TA report on the Governance and Anti-Corruption Diagnostic Assessment once it is finalized.

### Climate resilience and adaptation
- Strengthen Ghana’s resilience to climate shocks, noting the dry spell’s adverse impact on the poor and most vulnerable.
- Enhance climate resilience through well-integrated adaptation measures and leverage climate financing from development partners to promote green growth.
- Plan to expedite implementation of cross-sectoral adaptation priorities outlined in Ghana’s National Adaptation Plan (NAP) framework to achieve sustainable development, poverty reduction, and climate change adaptation simultaneously.

### Conclusion and program support request
- Authorities remain steadfast in implementing sound macroeconomic policies to boost durable macroeconomic stability and medium-term fiscal and debt sustainability, and to lay the foundation for enduring, inclusive, and green growth.
- Given their strong program ownership, full commitment and robust performance, the authorities are seeking the support of Executive Directors for the completion of the third review under the ECF arrangement to advance prudent execution of their stabilization and reform agenda.

*Source: 1ghaea2024004-print-pdf - 5.      Fiscal discipline remains the authorities’ top priority at this crucial time. The*

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_Source: https://www.imf.org/-/media/files/publications/cr/2024/english/1ghaea2024004-print-pdf.pdf_