(Bloomberg) -- Ghana is close to receiving another $360 million from the International Monetary Fund after the latest review of a funding program for the West African nation.
A final decision on the disbursement will be taken by the IMF executive board by early December, Minister of Finance Mohammed Amin Adam said in the capital, Accra on Friday.
The additional funding following the third review of Ghana’s extended credit facility, will bring to $1.92 billion the amount that Ghana has received since agreeing a $3 billion bailout from the fund in May 2023. Ghana sought IMF help after it could no longer service its loans and kicked off a debt-restructuring in December 2022.
“Program performance has been generally satisfactory, with remarkable progress on debt restructuring,” Stéphane Roudet, the IMF’s mission chief, said in a statement. “All end-June 2024 quantitative targets were met, and progress on key structural reforms has continued notwithstanding delays in a few areas.”
The funding news comes after almost all of Ghana’s dollar bond investors agreed to a debt exchange, paving the way for the country to issue new securities to holders to replace existing $13 billion of eurobonds. The offer will mark the completion of Ghana’s external debt revamp, after $5.1 billion of bilateral loans and 203.4 billion cedis ($12.8 billion) of domestic obligations were reorganized.
The IMF inflows will help the Bank of Ghana boost its dollar reserves and better defend the cedi, which has lost 24% of its value against the dollar this year — the fifth-worst performing currency among those tracked by Bloomberg. Foreign reserves inched up to $7.5 billion in August from $7.4 billion the month before.
Roudet said a recent dry spell affecting northern regions of Ghana may adversely impact agricultural output, potentially constraining economic growth and adding pressure to food prices for the remainder of the year.
Ghanaian inflation accelerated for the first time in six months in September to 21.5% as food costs accelerated. Roudet said he expects a policy response from the government and the central bank’s commitment to a tight monetary policy “to support a continued decline in inflation.”
The Bank of Ghana expects inflation to end the year at 18%, Governor Ernest Addison said, raising the upper band of the bank’s year-end target from 17%. Just a week ago the central bank cut its benchmark interest rate to 27% by 200 basis points - the biggest in six years, saying risks to the inflation outlook were assessed to be fairly balanced.
(Updates with comment from IMF mission chief from second paragraph.)
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