Third tranche IMF funds expected in June — 2nd review starts today

THE government expects the third tranche of US$360 million from its programme with the International Monetary Fund to hit the accounts of the Bank of Ghana by June this year, Minister of Finance, Dr Mohammed Amin Adam, has indicated.

With the IMF mission commencing its second review of Ghana’s programme today (April 2), the minister said he was confident the country would scale through the assessment to enable the Board of the fund to sit by June to approve the release of the funds.

“Approval of the second review by the board of the fund possibly by June 2024 will trigger the release of the third tranche of $360 million dollars, bringing the total disbursement so far under the programme to US$1.56 billion,” he said at the maiden Monthly Economic Update series instituted by the Ministry of Finance.

The approval of Ghana’s programme by the board in May 2023 saw the immediate release of the first tranche of US$600, with the approval of the first review, leading to the release of another US$600 million.

The remaining US$1.8 billion is expected to be disbursed in five tranches after each semi-annual review, with each review leading to the disbursement of US$360 million.

Dr Amin Adam said the second review would be the first of the two semi-annual reviews in 2024, with the third review scheduled for November.

“And anytime we are successful with the review, we will see disbursement. This will not only add to building our reserves but also strengthen our currency and also provide support for budget implementation,” he stated.

IMF team 

A team from the International Monetary Fund (IMF) will be in town from today (April 2) to April 12 to conduct a second review of Ghana’s three-year, $3 billion programme with the fund.

The second review follows the successful completion of the 1st review of the programme in January.

The IMF team is expected to engage the Ghanaian authorities in technical and policy discussions to enable them to assess Ghana’s performance on programme objectives, the six Quantitative Performance Criteria (QPCs), the three Indicative Targets (ITs), one Monetary Policy Consultation Clause (MPCC), and the Structural Benchmarks (SBs) with respect to end Dec 2023 targets. 

They will also review performance towards upcoming QPCs, ITs and SBs. 

Dr Amin Adam said the Ministry of Finance was working with the Bank of Ghana in preparation for the review mission. He added that preliminary assessment undertaken by the ministry and BoG showed that the country was on course to meeting most of the targets under the programme.

Update of debt restructuring 

Giving an update on the country’s external debt restructuring negotiations which is expected to feature in discussions with the fund, Dr Amin Adam said the government had made significant progress. 

On December 13, 2022 Ghana formally requested for debt treatment under the G20 Common Framework for Debt Treatment Beyond the Debt Service Suspension Initiative (CF-DSSI) for a portfolio size of US$5.1 billion.

Ghana’s bilateral creditors subsequently established the Official Creditor Committee (OCC) on May 12, 2023, under the auspices of the Paris Club to restructure the bilateral debt. 

The OCC is co-Chaired by France and China. The Government on January 12, 2024 announced that it has reached an agreement with its Official Creditors under the G20 Common Framework, on a comprehensive Debt Treatment Beyond the Debt Service Suspension Initiative. 

The minister said the terms of the agreed debt treatment was expected to be formalised in a Memorandum of Understanding between Ghana and Official Creditors, which will then be implemented through bilateral agreements with each member of the Official Creditor Committee. 

He said the OCC agreement constituted an additional step towards restoring Ghana’s long-term debt sustainability in line with the International Monetary Fund (IMF) programme targets. 

“The final step involves the restructuring of our commercial debt, particularly our Eurobonds. The IMF Board's approval of the first review and the recent agreement with Official Creditors set the stage for accelerating our engagement with the bondholders,” he stated. 

He said the government has received counterproposals on the debt treatment scenarios from the two bondholder groups. “In the coming weeks, government and our advisors will start extensive discussions with bondholder representatives to advance restructuring engagements following agreement with the OCC.”

“Ultimately, the engagements with Ghana’s commercial creditors, including bondholders are expected to ensure that Ghana achieves the targets set under the IMF/World Bank Debt Sustainability Framework,” he said.b