IMF Executive Board Completes the Fourth Review under the Extended Credit Facility Arrangement with Ghana
IMF News, July 7, 2025
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Bibliographic details
- Published: July 7, 2025
Overview and action taken
- The Executive Board completed the fourth review of the US$3 billion, 36-month Extended Credit Facility (ECF) Arrangement approved in May 2023.
- Completion of the fourth ECF review allows for an immediate disbursement of about US$367 million (SDR 267.5 million), bringing Ghana’s total disbursements under the arrangement to about US$2.3 billion.
- Press Release No. 25/242; date: July 7, 2025.
Recent macroeconomic outcomes
- Growth:
- 2024 and Q1 2025 growth was higher than expected, driven by mining, agricultural, ICT, manufacturing, and construction.
- GDP at constant prices (annual percentage change, selected series): 2023 actual 3.1; 2024 prelim. 5.7; 2025 proj. 4.0; 2026 proj. 4.8; 2027 proj. 4.9; 2028 proj. 5.0.
- Non-extractive GDP: 2023 actual 3.3; 2024 prelim. 5.1; 2025 proj. 3.6; 2026 proj. 4.6.
- Extractive GDP: 2023 actual 1.7; 2024 prelim. 9.4; 2025 proj. 7.0; 2026 proj. 5.9; 2027 proj. 4.7.
- Real GDP per capita: 2023 actual 1.2; 2024 prelim. 3.7; 2025 proj. 2.1; 2026 proj. 2.9; 2027 proj. 3.2.
- Inflation and price measures:
- GDP deflator: 2023 actual 40.1; 2024 prelim. 25.4; 2025 proj. 17.0; 2026 proj. 7.8; 2027 proj. 6.8; 2028 proj. 6.9; 2029 proj. 7.6.
- Consumer price index (end of period): 2023 actual 23.2; 2024 prelim. 23.8; 2025 proj. 12.0; 2026 proj. 8.0.
- Consumer price index (annual average): 2023 actual 39.2; 2024 prelim. 22.9; 2025 proj. 17.3; 2026 proj. 9.3.
- External sector:
- Current account balance (percent of GDP): 2023 actual -1.6; 2024 prelim. 1.1; 2025 proj. 1.8; 2026 proj. 1.4; 2027 proj. 1.3; 2028 proj. 0.5.
- Gross international reserves (program, US$ million): 2023 3,661; 2024 6,404; 2025 8,366; 2026 7,926; 2027 9,585; 2028 11,358; 2029 13,614; 2030 14,948.
- Reserves in months of prospective imports: 2.6 (2023); 3.0 (2024); 3.5 (2025); 3.9 (2026); 4.5 (2027).
Program performance and slippages
- Despite stronger growth and improved external position, program performance deteriorated markedly at end-2024:
- Causes: pre-election fiscal slippages and a large accumulation of payables; inflation above program targets; delays in reforms across fiscal, financial, and energy sectors.
- Preliminary fiscal data point to slippages in the run-up to the 2024 general elections.
- The deterioration included delays in several reforms and policy actions across the fiscal, financial, and energy sectors.
Corrective measures and fiscal stance
- New authorities enacted decisive corrective measures to secure program targets and keep reforms on track:
- Enacted a strong budget and public financial management reforms, including strengthening budget controls and undertaking a comprehensive audit of payables accumulated end-2024.
- Adopted measures to achieve a 1½ percent of GDP fiscal primary surplus in 2025 through additional revenue mobilization and expenditure rationalization while protecting the vulnerable.
- Emphasis on strengthening revenue administration, bolstering public financial management, and improving State-Owned Enterprises (SOEs) management—particularly addressing energy and cocoa sector challenges and related arrears.
- Central government budget (percent of GDP, projections assume full debt restructuring):
- Revenue: 2023 actual 15.2; 2024 prelim. 15.9; 2025 proj. 16.6; 2026 proj. 16.8; 2027 proj. 16.9.
- Expenditure (commitment basis): 2023 18.5; 2024 18.7; 2025 18.6; 2026 18.9; 2027 19.2; 2028 19.6.
- Overall balance (commitment basis): 2023 -3.4; 2024 -7.3; 2025 -2.8; 2026 -2.1; 2027 -1.8; 2028 -2.0; 2029 -2.2; 2030 -2.6.
- Primary balance (commitment basis): 2023 -0.3; 2024 -3.3; 2025 1.5; 2026 1.0.
- Non-oil primary balance (commitment basis): 2023 -1.7; 2024 -5.0; 2025 0.4; 2026 0.3; 2027 0.2; 2028 0.1; 2029 -0.4.
Monetary policy and financial sector measures
- Bank of Ghana (BoG) actions:
- Tightened monetary policy stance to sustain continued reduction in inflation.
- Successfully rebuilt international reserves.
- Implemented risk containment measures to support banking system stability.
- Intensified monitoring and escalated measures at weak, undercapitalized banks to promote timely recapitalization; strengthen risk management frameworks and practices, including to reduce NPLs; and ensure effective governance.
- Money and credit (selected indicators):
- Credit to the private sector (commercial banks): 2023 actual 10.7; 2024 prelim. 26.3; 2025 proj. 24.7; 2026 proj. 16.1; 2027 proj. 16.3.
- Broad money (M2+): 2023 actual 38.7; 2024 prelim. 31.9; 2025 proj. 23.4; 2026 proj. 13.0; 2027 proj. 12.1; 2028 proj. 12.3.
- Base money: 2023 actual 47.8; 2024 prelim. 16.2; 2025 proj. -1.1; 2026 proj. 12.7; 2027 proj. 14.8; 2028 proj. 9.8.
- Policy rate (end of period): 2023 30.0; 2024 27.0; 2025 N.A.
- Financial-sector priorities going forward:
- Maintain appropriately tight monetary stance until inflation returns to target; reduce BoG footprint in the foreign exchange market; allow for greater exchange rate flexibility and adopt a formal internal FX intervention policy framework.
- Fully implement the plan to strengthen NIB; finalize reform strategy to support state-owned banks’ viability and sustainability; develop contingency plans for weak banks that fail to recapitalize.
- Improve crisis management and resolution framework, enhance financial-sector safety nets, and address legacy issues at specialized deposit-taking institutions.
Debt restructuring, financing needs, and ratings
- Debt restructuring progress:
- Memorandum of Understanding (MoU) with Ghana’s Official Creditors Committee (OCC) under the G20 Common Framework has been signed by all parties; focus shifted to finalizing bilateral agreements to implement the MoU.
- Authorities pursuing good-faith efforts to reach agreements with commercial creditors in line with program parameters and comparability of treatment principles.
- Financing and BOP items (US$ million, as reported):
- BOP financing gap: 2024 3,364; 2025 13,741; 2026 9,124; 2027 3,659; 2028 0.
- IMF flows: 2024 600; 2025 1,320; 2026 720; 2027 360.
- World Bank flows: 2024 27; 2025 390; 2026 886; 2027 487.
- AfDB flows: 2024 60; 2025 44.
- Debt Restructuring Related Flows: 2024 2,677; 2025 12,031; 2026 7,474; 2027 2,812.
- Note: Additional financing needed to gradually bring reserves to at least 3 months of imports by 2026. The large 2024-2026 financing gaps result from debt restructuring accounting, with both debt deferral and the nominal value of the debt exchanges included here.
- Outcome on credit ratings:
- Against the backdrop of policy actions and progress on debt restructuring, Ghana’s credit rating has been upgraded by key international credit rating agencies.
Structural reforms and longer-term priorities
- Structural reform priorities:
- Ambitious reforms to foster private sector investment, enhance governance and transparency, boost potential growth, and underpin sustainable job creation.
- Strengthen public financial management, revenue administration, and SOE management, with decisive action in the energy sector to contain fiscal risks and address arrears.
- Social protection stance:
- Fiscal consolidation measures will aim to protect the vulnerable and create space for development priorities and enhanced social safety nets.
Executive comments and program outlook
- Deputy Managing Director Bo Li highlighted:
- Authorities have taken bold corrective actions in response to large policy slippages and reform delays at end-2024.
- Staying the course of fiscal adjustment and completing debt restructuring are key to ensure fiscal sustainability.
- Important priorities include improving tax administration, strengthening expenditure controls, improving SOEs’ efficiency, forcefully addressing energy-sector challenges and arrears, sustaining tight monetary policy until inflation returns to target, reducing BoG FX market footprint, and enhancing financial-sector resilience.
- Outlook:
- Continued implementation of corrective measures, reforms, and debt restructuring is essential to restore macroeconomic stability, debt sustainability, and to support higher and more inclusive growth and poverty reduction.
Source: IMF Executive Board Completes the Fourth Review under the Extended Credit Facility Arrangement with Ghana (Press Release No. 25/242, July 7, 2025).