Ghana Receives First Tranche of US$600m IMF Loan Today

By GNA 

May 19, 2023

Dr. Ernest Addison

Dr Ernest Addison, Governor, Bank of Ghana (BoG), says the first tranche of $600 million of the $3 billion loan facility from the International Monetary Fund (IMF) will hit the Government’s account on Friday.

The amount will be used to help reduce interest payment on loans, debt levels, and budget deficit, as the government seeks to restore macroeconomic stability and make the country’s debt sustainable.

Speaking at a press conference in Washington DC on Thursday, the Central Bank Governor said: “We have had a swift advice today to receive the money and value day tomorrow to $604 million.”

Additional funding of $250m is expected at the end of the third quarter of this year, together with financing support from the African Development Bank (AfBD) and other development partners.

All those funds are to support the Government’s three-year homegrown Post COVID-19 Programme for Economic Growth (PC-PEG) to make the Ghanaian economy more resilient and withstand shocks in the future.

Responding to a question posed by the Ghana News Agency on what the $600m would be used for, Mr Ken Ofori-Atta, Finance Minister said: “The exercise is crucial to be able to reduce the level of interest that we’re paying and support our debt.”

“We’re running a budget deficit and agreeing for a zero financing for that, so, to continue to support the programmes that we have is where the $600m will be deployed,” he added.

The Minister said the government remained committed to protecting the vulnerable in the implementation of the IMF-loan support programme through various social protection measures, while ensuring efficiency in providing services to the people.

“We have to reengineer the type of imports that we have – moving towards food security so that the importation of rice, poultry and tomato are brought down and we produce those ourselves,” the Minister encouraged Ghanaians.

Mr Ofori-Atta noted that doing so would signal a new way forward that would increase the resilience and sustainability of the programme even beyond the three-year period.

“The programme is quite ambitious in terms of putting the Government finances on a sound footing and ensuring sustainability – it’s comprehensive both in terms of policy and structural reform,” said Mr Stephane Roudet, IMF Mission Chief for Ghana.

“All of these efforts combined would contribute to macroeconomic stability and make public finances more resilient to shocks and create space for the government to spend more on helping the most vulnerable,” he added.

He asked the government to ensure that it provided better services at lower cost, increase social protection programmes and make expenditure more efficient, IMF Mission Chief for Ghana said.

The $3bn IMF-loan support programme with Ghana comes on the back of an economic crisis induced by the COVID-19 pandemic, Russia-Ukraine war and internal structural problems, which the government has promised to tackle soon.