The decision comes after the gold, oil, and cocoa producer reached a deal to restructure US$5.4 billion of loans with its official creditors, a key step to unlocking the second tranche of IMF funding.
“All quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met,” the IMF said in a statement.
The authorities’ reform efforts have helped to improve growth, decrease inflation and increase international reserves, the Fund said, forecasting that the economy would grow 2.3% in 2023 and 2.8% in 2024.
In a joint briefing with the Ghanaian authorities after the announcement, IMF’s mission chief for Ghana Stephane Roudet said the tranche would be available to the central bank within hours.
‘Shot in the arm’
Ghana turned to the IMF for financial support in 2022 as it grappled with its worst economic crisis in a generation, which came amid spiralling public debt-servicing costs.
“The board decision, along with the imminent release of funds, is a shot in the arm for the economy, especially the exchange rate, which remains vulnerable to fluctuations in sentiments and central bank reserve capacity,” Leslie Dwight Mensah, an economist at the Institute for Fiscal Studies in Accra, told Reuters.
The second tranche should trigger US$550 million in additional World Bank funding, Ghana’s finance ministry said last week – US$300 million in budget support, which the World Bank confirmed on Thursday, and US$250 million for a fund to support financial sector stability.
At Friday’s briefing, finance minister Ken Ofori-Atta said the World Bank was scheduled to meet on Jan 23 to approve these disbursements.
The West African country, which defaulted on most external debt after servicing costs soared, also needs to reach a relief deal with private holders of about US$13 billion in international bonds.
Ofori-Atta said official engagement with these bondholders would start as early as next week and an agreement could be reached by mid-March.
Asked if the next tranche of US$360 million was contingent on Ghana reaching this agreement, the IMF’s Roudet said, “What is important is the government engages in good faith discussions…We hope good progress can be made in the next few weeks.”
Ghana is aiming to restructure two-thirds of its external debt that was about US$30 billion at the end of 2022.