$600m Second Tranche Disbursement: IMF Board reschedules meeting to January 2024

Information reaching norvanreports indicates that the International Monetary Fund (IMF) has rescheduled its board meeting to consider Ghana’s second review under the Fund programme and the disbursement of the second tranche of $600 million to January 11, 2024.

This was picked up from some members of the Official Creditor Committee (OCC) negotiating with Ghana on the restructuring of the country’s debt with bilateral creditors.

The sources have described some significant progress that Ghana has made with its external bilateral creditors on the terms of restructuring the bilateral debt, especially with China.

It is based on these developments that the IMF has put up this new date. It is believed that all lingering issues would have been addressed before this new date to enable the board to meet on Ghana’s programme.

Sources say a draft Memorandum of Understanding would have been issued by the Official Creditor Committee by now, but a concern from one of the members has delayed this action.

The IMF Board was expected to meet on Ghana’s programme for the second review in November 2023.

However, the challenge in reaching an agreement with China on the debt restructuring compelled the Fund to reschedule the date on two occasions; in the first week of December 2023 and December 21, 2023.

Sources, however, say all hurdles have now been cleared and that could soon help the Official Creditor Committee to issue the needed MoU on Ghana’s debt restructuring.

Based on engagements with some persons on the Official Creditor Committee, there are optimism that some significant progress will be made before the Board meeting on January 11, 2024. This is due to some fresh commitment from China.

Sources say, China has resolved to address all the issues with Ghana before the new board meeting date.

Sources also say the IMF is not considering a “Full Agreement” between the Official Creditor Committee and Ghana on restructuring of the bilateral debt, but want what some may describe as a “Letter of Comfort” or Memorandum of Understanding from the Official Creditor Committee that it is open to discussions with Ghana on restructuring the bilateral debt.

Some have argued that the IMF is also looking for some assurance from these bilateral creditors that they will fully participate in providing the financing assurance for Ghana’s programme.

Officials of the Government of Ghana have expressed confidence in securing a deal, because of the significant progress that has been made with all the bilateral creditors on restructuring of their debt.

They argue that Ghana will be able to get the Official Creditor Committee to issue an MoU for the IMF Board to meet on Ghana’s programme on January 11, 2024.

The Finance Minister, Ken Ofori-Atta, in a media interview, noted that the government was very confident to soon reach a deal with all its bilateral creditors to facilitate the IMF Board meeting on Ghana.

He added that “Ghana will continue with the necessary engagements with all of its bilateral creditors to resolve all the concerns that have come up before the new board meeting date of January 11, 2024”.

Ghana is expected to get about $3 billion under the IMF programme.

An official release from the IMF Ghana showed that the IMF Executive Board approved, on May 17, 2023, an SDR 2.242 billion (about $3 billion) 36-month Extended Credit Facility (ECF) arrangement for Ghana.

This decision enabled an immediate disbursement of $600 million, equivalent to SDR 451.4 million. The rest is expected to be disbursed in tranches every six months, following programme reviews approved by the IMF Executive Board.

Source:norvanreports