The International Monetary Fund’s executive board on Wednesday approved a $3 billion, three-year loan program for Ghana, allowing for an immediate disbursement of about $600 million and a potential path out of the West African country’s worst economic crisis in a generation.
The IMF said in a statement that securing timely debt restructuring agreements with external creditors would be essential to successfully implement the Extended Credit Facility loan aimed at helping Ghana overcome immediate policy and financing challenges.
The Fund also said the new loan would help mobilize additional external financing from development partners and provided a framework for completing its debt restructuring.
“Congratulations to Ghana for a strong program of reforms to revitalize growth and reduce the country’s debt burden,” IMF Managing Director Kristalina Georgieva said in a video posted to Twitter.
Congratulations to President @NAkufoAddo & his team on the $3 billion IMF-supported program approved by our Executive Board.
We stand with Ghana as it implements reforms to address the current economic and financial crisis and help build a better future for all Ghanaians.
— Kristalina Georgieva (@KGeorgieva) May 17, 2023
It is negotiating its international debt rework under the Group of 20’s Common Framework platform and completed a domestic debt exchange this year.
Some $5.4 billion of debt to official creditors has been earmarked for restructuring, according to government data, as well as $14.6 billion owed to private overseas creditors.
Zambia, the first African country to default in the COVID-19 era, secured an IMF loan in September 2022 and still has not agreed debt restructuring terms with creditors.
Analysts expect Ghana’s process to be faster and smoother since China holds a smaller proportion of Ghana’s debt. China is Zambia’s largest bilateral creditor and has been accused of delaying that country’s debt restructuring, which it denies.
Credit: Reuters
