Government has set a new indicative target to limit total disbursements under pre-Cut-Off Date (CoD) facilities to US$250million annually over the period of 2024-2025.
This measure aims to keep disbursements within programme targets while addressing challenge posed by the significant volume of undisbursed funds from prior commitments.
The directive follows assessment from an International Monetary Fund (IMF) staff report, which emerged after the second review of Ghana’s 36-month Extended Credit Facility Arrangement.
The report highlighted that undisbursed amounts under external bilateral and commercial facilities, signed before the debt restructuring CoD, were substantially larger than initially anticipated. An estimated US$3.8billion in undisbursed funds from bilateral commitments alone has presented a considerable obstacle to achieving debt targets.
“The authorities will carefully monitor disbursements associated with bilateral and commercial projects signed before December 2022,” the IMF report stated. This vigilant oversight is crucial in ensuring that project disbursements align with programme parameters.
In response to these findings, Ghanaian authorities – along with the Official Creditors Committee (OCC) – have agreed that the pace of project disbursements will be calibrated according to programme parameters.
Government will evaluate the maturity and socio-economic value of each project, their expected pace of disbursement and the associated debt service profile. Based on this comprehensive assessment, a prioritisation strategy will be implemented, which may involve rescaling, rephasing or even cancelling some projects.
“We are committed to maintaining our debt sustainability and achieving our macroeconomic objectives,” stated Finance Minister Dr. Mohammed Amin Adam. “This new indicative target is a critical step in ensuring that our external project disbursements stay within the defined limits.”
To further support this initiative, a monthly intra-government monitoring mechanism will be established.
Source:theghanareport.com