The International Monetary Fund and Ghana's government have reached a staff-level agreement on a fourth review of its $3 billion loan programme.
The agreement, once approved by the IMF Executive Board, will grant Ghana access to approximately US$370 million in financial support.
This will bring the total IMF financial support disbursed under the arrangement since May 2023, to SDR 1,708 million, approximately US$2.355 billion
The IMF said in a statement on Tuesday that Ghana's overall performance under the programme had deteriorated markedly at the end of 2024. However, authorities had since taken measures to address policy and reform slippages, it added.
“Growth in 2024 was higher than expected, underpinned by strong mining and construction activity. The external sector has seen a considerable improvement, driven by solid exports—particularly gold and to a lesser extent oil—and higher remittances. As a result, international reserves accumulation has far exceeded the ECF-supported program targets.
“Notwithstanding these achievements, overall performance under the IMF-supported program deteriorated markedly at end-2024. Preliminary fiscal data point to slippages in the run-up to the 2024 general elections, on account of a large accumulation of payables. Inflation exceeded program targets. Several reforms and policy actions were delayed across the fiscal, financial, and energy sectors.
“Against this backdrop, the new authorities have taken bold measures to address policy slippages and ensure the program objectives remain within reach. On the fiscal front, the government has launched an audit of the payables to firm up the size and nature of the slippages. Based on preliminary estimates of new payables, the primary balance posted a deficit of some 3¼ percent of GDP (compared to a targeted surplus of ½ percent of GDP). To address these slippages, the authorities have enacted a 2025 budget that targets a 1½ percent of GDP primary surplus and adopted several public financial management reforms. The latter includes an enhanced fiscal responsibility framework and new rules to tighten expenditure commitments.
“Discussions with the authorities centered on possible additional measures needed to address structural weaknesses in the public financial management and procurement systems as well as steps to ensure fiscal execution remains consistent with program objectives. Engagement with the authorities also focused on measures aimed at strengthening key social protection programs to cushion the most vulnerable from the impact of high inflation and ongoing policy adjustment.
“The Bank of Ghana has recently increased its policy rate and is reviewing its liquidity management operations. The ensuing tightening in the monetary policy stance, together with the ongoing fiscal consolidation, is expected to bring inflation down.
The IMF mission, which was in Ghana last week engaged the authorities on their wide-ranging structural reform program, with a focus on enhancing governance and transparency and strengthening State-Owned Enterprises management in the gold, cocoa, and energy sector.
The staff met with the Finance Minister Forson, Bank of Ghana Governor, Dr. Johnson Asiama, and their teams, as well as representatives from various government agencies and other stakeholders.
It expressed its gratitude to the Ghanaian authorities and other counterparts for their continued open and constructive engagement.