IMF approves $3 billion loan for Ghana to tackle economic crisis and implement structural reforms

In Accra, the authorities will be able to breathe. The International Monetary Fund (IMF) on Wednesday approved a loan of three billion dollars for Ghana, a country in West Africa which is going through a serious economic crisis, with an immediate first disbursement of around 600 million dollars.

The programme, endorsed by the IMF’s board of directors, is spread over 36 months under the extended credit facility. It aims at “restoring macroeconomic stability and debt sustainability, as well as implementing far-reaching reforms to build resilience and lay the foundations for stronger and more inclusive growth”, said commented the Managing Director of the Fund, Kristalina Georgieva.

Structural reforms desired by the IMF

According to her, “fiscal consolidation is a central element of the program” as well as “the preservation of the stability of the financial sector”. Furthermore, “monetary and exchange rate policies under the program will focus on controlling inflation and rebuilding foreign exchange reserves”.

Finally, “an ambitious program of structural reforms has been put in place to revitalize growth driven by the private sector by improving the business environment, governance and productivity”.

Explosion of the debt burden

On Friday, the IMF announced that Ghana had provided sufficient guarantees to benefit from an aid plan, welcoming the recent promise of its creditor countries, led by France and China, to open negotiations with a view to restructuring of its debt.

Weakened in particular by the repercussions of the war in Ukraine, Ghana had resolved to appeal to the IMF and had concluded in December with the institution a preliminary agreement to obtain 3 billion dollars in loans spread over three years and conditional on the implementation of economic reforms. A major producer of cocoa and gold, the country also has gas and oil reserves, but the burden of its debt has exploded, as in other countries in sub-Saharan Africa, under the impact of the Covid pandemic. -19 and the Ukrainian conflict.