IMF approves $360m payout to Ghana after debt deal

AFRICAN BUSINESS AND ECONOMYJuly 1, 2024 at 9:29 AM UTC

TLDR

IMF approves second review of Ghana's $3 billion loan program, allowing $360 million disbursement.
Ghana's deal with official creditor committee unlocks second tranche of funds.
Total IMF disbursements under bailout program for Ghana reach $1.56 billion.

The International Monetary Fund's executive board approved the second review of Ghana's $3 billion loan program on Friday, allowing for the immediate disbursement of around $360 million, the Fund said.

The decision comes after the oil, gold, and cocoa producer finalized a deal with its official creditor committee, a step that had been a pre-requisite to unlock the second tranche.

The new tranche will take total IMF disbursements under the three-year bailout program designed to help Ghana out of its worst economic crisis in a generation to $1.56 billion.

Key Takeaways

Ghana has been restructuring its $30 billion debt under the G20's Common Framework mechanism. This month, it reached an agreement in principle with two bondholder groups to restructure around $13 billion of its debt, moving closer to completing the debt overhaul. The West African nation sought financial support from the IMF in 2022 as its cedi currency plummeted and inflation soared, driven by spiraling debt-service costs due to years of overspending, the COVID-19 pandemic, Russia's invasion of Ukraine, and high global interest rates. Since then, the economy has stabilized. Economic growth surprised at 2.9% last year and reached 4.7% in the first quarter of 2024. Inflation has slowed from a peak of over 54% in December 2022 to 23.1% last month, although the cedi has continued to depreciate.

Ghana

Cedis

Economy

Eurobond

Debt Crisis

Debt Revamp

G20

Debt Overhaul

Sovereign Credit