IMF Executive Board Completes the Third Review under the Extended Credit Facility Arrangement with Ghana
IMF News, December 2, 2024
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- Published: December 2, 2024
Review completion and immediate financing
- The IMF Executive Board completed the third review of Ghana’s 36-month Extended Credit Facility (ECF) Arrangement.
- Completion allows for the immediate disbursement of SDR 269.1 million (about US$360 million).
- Completion brings Ghana’s total disbursements under the arrangement to about US$1.9 billion.
- The ECF Arrangement is for US$3 billion and was approved in May 2023.
Program performance, reform progress, and outlook
- Ghana’s performance under the program has been described as "generally satisfactory."
- Key outcomes reported:
- Growth is recovering rapidly.
- Inflation has declined, although at a slower pace.
- Fiscal and external positions have continued to improve.
- Good progress has been made on debt restructuring.
- The medium-term outlook is characterized as favorable but subject to downside risks, including those stemming from the elections and challenges in the energy sector.
- Steadfast implementation of the policy and reform agenda, including before and after the upcoming general elections, is emphasized as essential to fully restore macroeconomic stability and debt sustainability.
Fiscal stance, targets, and commitments
- All quantitative performance criteria and indicative targets for the third review were met.
- Fiscal performance highlights and targets:
- Fiscal performance is on track to achieve a primary surplus of ½ percent of GDP on a commitment basis.
- Authorities commit to attaining a primary fiscal surplus of 1½ percent of GDP in 2025 through additional domestic revenue mobilization and non-priority expenditure rationalization, while expanding social programs to cushion the vulnerable.
- Continued fiscal consolidation and discipline depend on:
- Modernizing Ghana’s fiscal responsibility framework.
- Strengthening revenue administration.
- Bolstering public financial management.
- Improving SOEs management, including addressing challenges in the energy and cocoa sectors.
- Promptly and forcefully addressing energy sector challenges is highlighted as critical to contain fiscal risks.
Debt restructuring
- Authorities made remarkable headway on public debt restructuring:
- Domestic debt was successfully restructured last year.
- Agreement reached on a Memorandum of Understanding with Ghana’s Official Creditors Committee (OCC) under the G20 Common Framework in June 2024.
- Government completed the exchange of its Eurobonds at conditions consistent with program parameters.
- Authorities have intensified engagement with remaining external commercial creditors on restructuring aligned with program parameters and comparability of treatment.
- Building on the recent successful Eurobond exchange, authorities are urged to finalize comprehensive debt restructuring in a timely manner.
Monetary policy and financial sector measures
- The Bank of Ghana (BoG) has:
- Maintained a prudent monetary policy stance to sustain a continued reduction in inflation against heightened risks.
- Taken important steps to rebuild international reserves.
- Strengthened measures to buttress financial sector stability by intensifying actions to promote timely recapitalization and steps to sustain the viability of banks.
- The government has started recapitalizing state-owned banks consistent with available resources.
- Continued recommendations:
- Maintain an appropriately tight monetary stance given upside risks to inflation.
- Enhance exchange rate flexibility.
- Sustain recapitalization efforts, pursue cost-effective resolution of legacy issues, and implement robust supervisory strategies to bolster credit and operational risk management.
Structural reforms and private sector
- Ambitious structural reforms are needed to:
- Create an environment more conducive to private sector investment.
- Enhance governance and transparency.
- Boost the economy’s potential and underpin sustainable job creation.
Selected economic and financial indicators (Ghana: Selected Economic and Financial Indicators, 2022–29)
- National accounts and prices (annual percentage change, unless otherwise indicated)
- GDP at constant prices:
- 2022: 3.8
- 2023: 2.9
- 2024 (Proj.): 4.0
- 2025 (Proj.): 4.4
- 2026 (Proj.): 4.9
- 2027 (Proj.): 5.0
- Non-extractive GDP:
- 2022: 3.1
- 2023: 3.0
- 2024 (Proj.): 3.5
- 2025 (Proj.): 4.5
- Extractive GDP:
- 2022: 8.9
- 2023: 2.5
- 2024 (Proj.): 7.0
- 2025 (Proj.): 3.9
- 2026 (Proj.): 4.3
- 2027 (Proj.): 4.7
- Real GDP per capita:
- 2022: 1.8
- 2023: 1.0
- 2024 (Proj.): 2.0
- 2025 (Proj.): 3.2
- GDP deflator:
- 2022: 28.2
- 2023: 33.1
- 2024 (Proj.): 20.4
- 2025 (Proj.): 10.6
- 2026 (Proj.): 7.8
- 2027 (Proj.): 7.7
- 2028 (Proj.): 7.6
- Consumer price index (end of period):
- 2022: 54.1
- 2023: 23.2
- 2024 (Proj.): 18.0
- 2025 (Proj.): 8.0
- Consumer price index (annual average):
- 2022: 31.9
- 2023: 39.2
- 2024 (Proj.): 21.9
- 2025 (Proj.): 11.4
- Central government budget (percent of GDP, unless otherwise indicated)
- Revenue:
- 2022: 15.7
- 2023: 16.0
- 2024 (Proj.): 17.1
- 2025 (Proj.): 17.2
- 2026 (Proj.): 18.1
- Expenditure (commitment basis) 1:
- 2022: 27.5
- 2023: 19.6
- 2024 (Proj.): 20.7
- 2025 (Proj.): 19.8
- 2026 (Proj.): 20.0
- 2027 (Proj.): 20.3
- Overall balance (commitment basis) 1:
- 2022: -11.8
- 2023: -3.6
- 2024 (Proj.): -3.5
- 2025 (Proj.): -2.7
- 2026 (Proj.): -1.9
- 2027 (Proj.): -1.7
- 2028 (Proj.): -1.8
- 2029 (Proj.): -2.2
- Primary balance (commitment basis):
- 2022: -4.3
- 2023: -0.3
- 2024 (Proj.): 0.5
- 2025 (Proj.): 1.5
- 2026 (Proj.): 1.3
- Non-oil primary balance (commitment basis):
- 2022: -6.3
- 2023: -1.2
- 2024 (Proj.): 0.1
- 2025 (Proj.): 0.2
- 2026 (Proj.): -0.1
- Public debt (gross) (percent of GDP)
- 2022: 92.7
- 2023: 83.1
- 2024 (Proj.): 78.0
- 2025 (Proj.): 72.2
- 2026 (Proj.): 67.2
- 2027 (Proj.): 63.0
- 2028 (Proj.): 59.4
- 2029 (Proj.): 56.8
- Domestic debt:
- 2022: 49.7
- 2023: 38.8
- 2024 (Proj.): 33.5
- 2025 (Proj.): 30.0
- 2026 (Proj.): 28.0
- 2027 (Proj.): 26.0
- 2028 (Proj.): 24.3
- 2029 (Proj.): 23.5
- External debt:
- 2022: 43.0
- 2023: 44.4
- 2024 (Proj.): 44.5
- 2025 (Proj.): 42.2
- 2026 (Proj.): 39.1
- 2027 (Proj.): 37.0
- 2028 (Proj.): 35.1
- 2029 (Proj.): 33.4
- Money and credit
- Credit to the private sector (commercial banks):
- 2022: 31.8
- 2023: 10.7
- 2024 (Proj.): 22.0
- 2025 (Proj.): 18.4
- 2026 (Proj.): 17.0
- Broad money (M2+):
- 2022: 33.0
- 2023: 38.7
- 2024 (Proj.): 28.8
- 2025 (Proj.): 17.3
- 2026 (Proj.): 13.1
- 2027 (Proj.): 13.2
- 2028 (Proj.): 13.0
- Velocity (GDP/M2+, end of period): (data not provided in table)
- Base money:
- 2022: 57.5
- 2023: 29.7
- 2024 (Proj.): 30.5
- 2025 (Proj.): 11.8
- 2026 (Proj.): 6.7
- 2027 (Proj.): 11.7
- 2028 (Proj.): 14.2
- Policy rate (in percent, end of period):
- 2022: 27.0
- 2023: ...
- External sector (US$ million, unless otherwise indicated)
- Current account balance (percent of GDP)2:
- 2022: -2.3
- 2023: -1.4
- 2024 (Proj.): 0.0
- 2025 (Proj.): -0.2
- 2026 (Proj.): -0.4
- 2027 (Proj.): -0.6
- BOP financing gap 3:
- 2022: -...
- 2023: 3,364
- 2024 (Proj.): 1,754
- 2025 (Proj.): 1,448
- 2026 (Proj.): 734
- 2027 (Proj.): 0
- IMF financing:
- 2023: 600
- 2024 (Proj.): 1,320
- 2025 (Proj.): 720
- 2026 (Proj.): 360
- World Bank financing:
- 2023: 27
- 2024 (Proj.): 390
- 2025 (Proj.): 728
- 2026 (Proj.): 374
- AfDB financing:
- 2023: 60
- 2024 (Proj.): 44
- Arrears to commercial external creditors:
- 2023: 1,841
- Arrears to official bilateral creditors:
- 2023: 836
- Exceptional financing to cover residual financing gap4: (note in source)
- Gross international reserves (program) 5 (US$ million):
- 2022: 1,454
- 2023: 3,661
- 2024 (Proj.): 5,381
- 2025 (Proj.): 6,905
- 2026 (Proj.): 7,789
- 2027 (Proj.): 9,323
- 2028 (Proj.): 11,072
- 2029 (Proj.): 13,058
- Gross international reserves (in months of prospective imports):
- 2022: 0.7
- 2023: 1.6
- 2024 (Proj.): 2.3
- 2025 (Proj.): 2.8
- 2026 (Proj.): 3.4
- Memorandum items
- Nominal GDP (millions of GHc):
- 2022: 614,336
- 2023: 841,633
- 2024 (Proj.): 1,053,875
- 2025 (Proj.): 1,216,674
- 2026 (Proj.): 1,375,843
- 2027 (Proj.): 1,556,936
- 2028 (Proj.): 1,761,114
- 2029 (Proj.): 1,990,418
- Population Growth Rate (percentage)6:
- 2022: 1.9
- 2023: 1.7
- Notes and data sources included in the original release:
- Projections (third review) assume full debt restructuring.
- The current account values for 2022 and 2023 reflect pre-external debt restructuring.
- Additional financing needed to gradually bring reserves to at least 3 months of imports by 2026.
- For the second review, to be covered by the external commercial debt restructuring.
- Gross international reserves exclude oil funds, encumbered assets, and pledged assets.
- Population Growth Rate: United Nations, World Population Prospects 2022.
- Sources: Ghanaian authorities; and Fund staff estimates and projections.
Press Release No. 24/447, December 2, 2024.