We are not going to ask government to do more adjustments – IMF

The Director of the African Department at the International Monetary Fund (IMF), Abebe Selassie, has said that the fund is not going to ask the government of Ghana to do further adjustments.

He says that they are very hopeful that ongoing discussions among official creditors will also expeditiously allow them to conclude the discussions in a bid to get the third tranche released.

Mr Abebe Selasie noted that Ghana has done its part in the move to get the Fund to release the third tranche.

It is now left with the external creditors to fulfill their part to get the board to approve the disbursement, he said.

Answering questions at a session at the World Bank Bank, IMF Spring Meetings in Washington on Thursday, April 18, he said “Whereas it took nine months or more for Zambia to get the official creditor committee to be created, in Ghana’s case it was very rapid and that is what allowed us to go to the board and get the programme approved.

“We are very hopeful that ongoing discussions among official creditors will also expeditiously allow us to conclude the upcoming review.

Again the most recent mission reached an agreement with the government on policies that are needed to tackle the most recent issues and also put in place an important budget for next year.

“So Ghana has done its fair share and it is for creditors to take steps on this, we are not going to ask the government to do more adjustments because creditors haven’t asked either.

So we will provide all the information necessary so creditors can move, allowing us to go to the board as soon as possible.”

The Finance Ministery had announced that the government had reached an interim agreement with international Bondholders.

To that end, the Ministry said the government would continue its negotiations until they reach a deal that is consistent with  debt sustainability targets.

“Update on External Debt Operations: Ghana and Bondholders reached an interim deal, which must still be tweaked to meet IMF debt sustainability targets.

We will therefore regroup to continue negotiations until we reach a deal that is consistent with IMF debt sustainability targets,” he wrote on X.

The Ministry announced earlier on Monday, April 15 that Ghana was unable to secure a workable debt deal with two bondholder groups in its push to restructure $13 billion of international bonds.

Reuters reported that formal talks were on hold for now after the International Monetary Fund indicated that the deal would not fit its debt sustainability parameters.

The  Mission Chief for Ghana, Mr.

Stéphane Roudet, had said that they were awaiting Ghana to reach an agreement with external creditors to enable the Board to review the staff-level agreement that has been reached as part of the process to release the third tranche.

The  staff and the Ghanaian authorities had reached a staff-level agreement on the second review of Ghana’s economic program under the Extended Credit Facility arrangement.

This staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received.

Mr Roudet said at a joint IMF, Ministry of Finance, Bank of Ghana press conference in Accra on Saturday, April 13 that an agreement between the Ghanaian authorities and their official creditors on an MoU for a debt treatment in line with programme parameters, would provide the needed financing assurances.

Upon completion of the Executive Board review, he said, Ghana would have access to US$ 360 million, bringing the total  financial support disbursed under the arrangement since May 2023 to US$ 1,560 million.

 

“Performance under the IMF-supported program has been generally strong, with most quantitative targets met.

Monetary policy has remained appropriately tight, allowing for inflation to decline rapidly.

 

“On the fiscal front, consistent with the authorities’ commitments under the IMF-supported program, the fiscal primary balance on a commitment basis improved by over 4 percentage points of GDP in 2023 and is on track to achieve a fiscal primary surplus of ½ percent of GDP in 2024.