{ "title": "Ghana: Transforming a Crisis into a Journey Toward Prosperity", "publication": "IMF News, January 29, 2024", "sourceUrl": "https://www.imf.org/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity", "canonical": "https://www.imf.org/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity", "overlayPath": "/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity/index.md", "summary": "Ghana is making important inroads to stabilize its economy, and continued program implementation beckons a brighter future.", "authors": [ "Leandro Medina January" ], "publishDate": "2024-01-29", "sections": [ { "heading": "Crisis background and triggers", "content": "- Ghana requested an IMF-supported program in July 2022 amid an economic and financial crisis.\n- Preexisting vulnerabilities and external shocks included the COVID-19 pandemic, Russia’s war in Ukraine, and global monetary policy tightening.\n- Consequences included:\n - Loss of international market access.\n - Increased pressures on domestic financing and monetary financing by the central bank.\n - Declining international reserves, currency depreciation, and accelerating inflation." }, { "heading": "Program approval and objectives", "content": "- IMF Board approved the program in May 2023.\n- Program aims:\n - Restore macroeconomic stability.\n - Secure debt sustainability.\n - Lay foundations for higher and more inclusive growth." }, { "heading": "Policy and reform commitment under the program", "content": "- Fiscal measures:\n - Budgets for 2023 and 2024 emphasize fiscal consolidation and sound public finances.\n - Fiscal efforts are central to ensuring long-term debt sustainability.\n- Structural reforms:\n - Enhance domestic resource mobilization.\n - Strengthen public financial management.\n - Create a business environment that better fosters private sector development.\n- Monetary and financial sector policies:\n - Bank of Ghana increased interest rates and eliminated monetary financing of the budget.\n - Inflation declined to 23 percent in December 2023 from a record high of 54 percent in December 2022.\n - Bank of Ghana aims to maintain policies to bring inflation down to levels consistent with their inflation targeting framework.\n - Authorities designed a plan to ensure financial sector stability.\n- Debt operations:\n - Government launched a comprehensive debt restructuring operation in December 2022 that includes:\n - A concluded domestic debt voluntary exchange.\n - Two external debt operations: one with official bilateral creditors and the other with commercial creditors.\n - Under the G20’s Common Framework, authorities reached agreement in principle with official creditors on a debt treatment consistent with program parameters.\n - Authorities are engaging external commercial creditors to seek their support." }, { "heading": "Early signs of stabilization and performance", "content": "- Performance under the program described as compelling, with the economy “turning the corner.”\n- Growth in 2023 showed resilience despite a difficult global environment.\n- Key macro developments:\n - Inflation declined from 54 percent in December 2022 to 23 percent in December 2023.\n - Currency recovered from a sharp depreciation of 45 percent vis-à-vis the US dollar at end-2022 and has been less volatile.\n - International reserves increasing.\n- Success factors cited:\n - Aligning the budget with the program.\n - Meeting program targets, especially net international reserve accumulation and primary fiscal balance.\n - Carrying out key structural reforms in the financial and energy sectors." }, { "heading": "Social dimension and protection of the vulnerable", "content": "- Authorities focused on expanding effective social protection programs while implementing reforms.\n- Social policy measures and outcomes:\n - Targeted cash transfer program (Living Empowerment Against Poverty):\n - Benefits doubled in 2023.\n - Benefits expected to be doubled again in 2024.\n - Benefit coverage increasing from about 6 percent to 12 percent (of household pre-transfer consumption).\n - Expected to significantly reduce poverty and inequality.\n - Education:\n - Allocations to the Ghana School Feeding Program and the Capitation Grant received a boost.\n - Health:\n - Allocation to the National Health Insurance Authority expanded by over 40 percent to cover medical claims, essential medicines, and vaccines for the most vulnerable.\n- These interventions are regularly monitored under the IMF-supported program." }, { "heading": "Path forward and risks", "content": "- Key priorities:\n - Lock in gains and continue steadfast implementation of the program.\n - Complete fiscal consolidation and debt restructuring operations to put public debt on a sustainable trajectory.\n - Continue reforms to foster recovery and bring economic growth back to long-term potential.\n - Continue policies to drive inflation lower toward the inflation targeting framework.\n- Risks and challenges:\n - Potential external shocks.\n - Political environment in the run-up to the 2024 Presidential and parliamentary elections.\n- Outlook conditional on sustained implementation:\n - If authorities continue to implement the package of policies and reforms with current commitment, sustained implementation of the program promises to bring a brighter future to all Ghanaians.\n\nBy Leandro Medina, January 29, 2024 — IMF News\n\n---\n\n\n References\n\n- GHANA AND THE IMF\n- REGIONAL ECONOMIC OUTLOOK\n- EASING DEBT PRESSURES IN LOW-INCOME COUNTRIES\n- https://www.imf.org/en/News/country-focus\n- approved by the IMF Board\n- reached agreement in principle with their official creditors\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity" } ], "bullets": [ "[Markdown version](/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity/index.md)", "[Structured JSON version](/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity/index.json)", "[Bundle manifest](/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity/bundle-manifest.json)", "Authors: Leandro Medina January", "Published: January 29, 2024", "Ghana requested an IMF-supported program in July 2022 amid an economic and financial crisis.", "Preexisting vulnerabilities and external shocks included the COVID-19 pandemic, Russia’s war in Ukraine, and global monetary policy tightening.", "Consequences included:", "IMF Board approved the program in May 2023.", "Program aims:", "Fiscal measures:", "Structural reforms:", "Monetary and financial sector policies:", "Debt operations:", "Performance under the program described as compelling, with the economy “turning the corner.”", "Growth in 2023 showed resilience despite a difficult global environment.", "Key macro developments:", "Success factors cited:", "Authorities focused on expanding effective social protection programs while implementing reforms.", "Social policy measures and outcomes:", "These interventions are regularly monitored under the IMF-supported program.", "Key priorities:", "Risks and challenges:", "Outlook conditional on sustained implementation:", "[GHANA AND THE IMF](https://www.imf.org/en/Countries/GHA)", "[REGIONAL ECONOMIC OUTLOOK](https://www.imf.org/en/Publications/REO/SSA/Issues/2023/10/16/regional-economic-outlook-for-sub-saharan-africa-october-2023)", "[EASING DEBT PRESSURES IN LOW-INCOME COUNTRIES](https://www.imf.org/en/Blogs/Articles/2024/01/24/how-to-ease-rising-external-debt-service-pressures-in-low-income-countries)", "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)", "[approved by the IMF Board](https://www.imf.org/en/News/Articles/2023/05/17/pr23151-ghana-imf-executive-board-approves-extended-credit-facility-arrangement-for-ghana)", "[reached agreement in principle with their official creditors](https://www.imf.org/en/News/Articles/2024/01/12/pr2408-ghana-imf-md-kristalina-georgieva-debt-treatment-agreement-official-creditors-g20-com-frmwrk)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity/index.md", "json": "/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity/index.json", "bundleManifest": "/en/news/articles/2024/01/29/cf-ghana-transforming-a-crisis-into-a-journey-toward-prosperity/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:42:23.782Z" }