Ghana: IMF Board to approve $360m third tranche by end of June

The International Monetary Fund (IMF) is on track to approve the third tranche of its $3 billion financing package for Ghana by the end of June 2024, according to Stephane Roudet, the Mission Chief to Ghana.

Ghana has secured a funding guarantee from holders of its Eurobonds and is actively working to finalize a memorandum of understanding (MoU) with its official creditors. This MoU is a prerequisite for accessing the IMF’s subsequent round of financial support.

Mr. Roudet conveyed the IMF’s confidence in adhering to this timeline during a media roundtable in Washington DC, stating, “The Fund is demanding an agreement between the official creditor committee and the Government of Ghana, subject to approval.”

The announcement follows a recent statement by Ghana’s Finance Ministry indicating a provisional arrangement with bondholders ahead of the formal MoU. Despite this, the IMF remains committed to supporting Ghana’s economic recovery efforts.

Abebe Aamro Selassie, head of the IMF’s Africa Department, clarified during a press conference at the 2024 Spring meetings in Washington DC, “The fact that they’ve not reached an agreement with its Eurobond holders will not prevent us from providing more financing, although reaching that agreement is, of course, important.”

He further affirmed the IMF’s confidence in Ghana’s financing assurance, stating, “To be clear, they have provided financing assurance, so we are not envisaging that to be an issue with our ability to conclude the next review and provide the disbursement.”

The IMF’s continued support underscores its commitment to aiding Ghana in restoring its economic stability.

Meanwhile, Ghana and its creditors expect to reach an agreement in principle to restructure overseas bonds as soon as the end of May, according to people with direct knowledge of the matter.

A committee of bondholders and representatives for the government are waiting for the International Monetary Fund to approve an updated economic review, which is likely to allow a deal to move forward, said the people, who requested anonymity because the talks are private.

The two sides are trying to rework about $13 billion of Eurobonds, one of the final steps in the nation’s restructuring process.

Staff from the Fund carried out a review after traveling to Ghana this month. At the conclusion of the trip, the IMF said economic growth was higher than initially expected and the country’s fiscal and external positions had improved significantly.

Source: norvanreports I IMF/World Bank April Spring Meetings