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IMF, Ghana agree on second review of $3 bln loan programme

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Ghana is confident it will “at some point” reach a deal with international bondholders to restructure $13 billion of debt, its finance minister said on Saturday, as the International Monetary Fund announced a successful loan programme review.

The West African country has been overhauling its debt as it seeks a way out of its deepest economic crisis in a generation with the help of the $3 billion IMF programme.

The Fund said the new staff-level agreement on the second review of the programme would unlock a $360 million tranche once Ghana provides financing assurances linked to a January deal to restructure $5.4 billion of loans with official creditors.

Regarding Accra’s separate and ongoing talks with international bondholders, the IMF’s Ghana mission chief Stephane Roudet said the IMF needed to continue to see progress.

Speaking at a joint news conference with Roudet, Finance Minister Mohammed Amin Adam expressed optimism but gave no timeline.

“Negotiations are ongoing. We’ve been more aggressive over the last two months… We are very confident that if things go the way they are, we certainly will reach a deal at some point,” he said.

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A non-disclosure agreement linked to the talks will expire on Monday, he added.

IMF PROGRAMME RESULTS

The cocoa-, gold- and oil-producing country turned to the IMF for financial support in 2022, when debt costs and spiralling inflation led it to default on most of its $30 billion of external debt.

The Fund’s Roudet said Ghana’s performance under the programme had been generally strong.

“The authorities’ strong policy and reform efforts to restore macroeconomic stability and debt sustainability … are already generating positive results,” he said.

“In other words, the programme is working.”

Inflation has dropped from a peak of 54% in 2022 to 25.8% as of March. The central bank sees it around 15% by the end of 2024 despite a recent slowdown in disinflation, Governor Ernest Addison told the news conference.

“On the IMF side, we expect some degree of flexibility to reflect changing dynamics in the Ghanaian economy,” Addison said, adding that an example of this was Ghana’s better-than-forecast inflation performance.

Once the latest tranche is released, the IMF will have disbursed the equivalent of about $1.56 billion under the programme since May 2023.

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