3rd tranche of IMF cash: Staff-level agreement is by far the most important component in 2nd review – Abebe Selassie
The Director of the African Department at the International Monetary Fund (IMF), Abebe Selassie, has said that the staff-level agreement that has been reached with the Government of Ghana, in an attempt to disburse the third tranche, is by far the most important component in the second review of the programme with the fund.
He said that the Fund hopes that Ghana will reach a debt deal with the bilateral creditors to enable the Board to meet to disburse the third tranche.
Answering questions at a session at the World Bank, IMF Spring Meetings in Washington on Thursday, April 18, “As of now there is no MOU with bilateral creditors but we know that there have been intense discussions in recent weeks, those are continuing and we are very hopeful that they will be able to meet the bilateral official creditors. To be clear, they have provided financial assurances.
IMF Bailout: Finance Minister optimistic of next tranche after MOU with creditors is secured
“As we noted we have reached a staff-level agreement and that is by far the most important component for the review.”
Abebe Selassie also noted that Ghana had 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.
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 IMF 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 $13 billion of international bonds.
Reuters reported that formal talks were on hold for now after the International Monetary Fund indicated that the deal would not fit its debt sustainability parameters.
The IMF staff and the Ghanaian authorities had reached a staff-level agreement on the second review of Ghana’s economic program under the Extended Credit Facility arrangement.
This staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received.
Mr Roudet said at a joint IMF, Ministry of Finance, Bank of Ghana press conference in Accra on Saturday, April 13 that an agreement between the Ghanaian authorities and their official creditors on an MoU for a debt treatment in line with programme parameters, would provide the needed financing assurances.
Upon completion of the Executive Board review, he said, Ghana would have access to US$ 360 million, bringing the total IMF 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. Good progress has also been made on the key structural reform milestones. The authorities’ policies and reforms to restore macroeconomic stability and debt sustainability while laying the foundations for stronger and more inclusive growth are already generating positive results.
“Economic activity in 2023 was more robust than initially envisaged, and growth projections for 2024 will be revised upward. Monetary policy has remained appropriately tight, allowing for inflation to decline rapidly.
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