IMF Finalizes Fourth Review of Ghana Credit Deal

• The IMF Executive Board today completed the fourth review of Ghana's 36-month Extended Credit Facility Arrangement. This allows for the immediate disbursement of about US$367 million (SDR 267.5 million).
• Notwithstanding higher-than-expected growth and significant further improvement in Ghana's external position last year, program performance deteriorated markedly at end-2024. This reflected pre-election fiscal slippages; inflation above program targets-though recent data point to renewed rapid disinflation; and reforms delays.
• Faced with a significant deterioration in program performance, the new authorities have responded decisively to secure achievement of the program targets and keep the structural reform agenda on track. Among other important steps, they enacted a strong budget and public financial management reforms; tightened monetary policy; and adjusted electricity prices.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) today completed the fourth review of the US$3 billion, 36-month Extended Credit Facility (ECF) Arrangement, which was approved by the Board in May 2023 . Completion of the fourth ECF review allows for an immediate disbursement of about US$367 million (SDR 267.5 million), bringing Ghana's total disbursements under the arrangement to about US$2.3 billion.

Growth in 2024 and the first quarter of 2025 was higher than expected, reflecting robust activity in the mining, agricultural, ICT, manufacturing, and construction sectors. The external sector has seen considerable improvement, driven by solid exports—particularly gold and to a lesser extent oil—and higher remittances. As a result, the accumulation of international reserves has far exceeded the ECF-supported program targets.

Notwithstanding these achievements, Ghana's performance under the IMF-supported program deteriorated significantly at end-2024. Preliminary fiscal data point to slippages in the run-up to the 2024 general elections, on account of a large accumulation of payables. Inflation exceeded program targets—though recent data points to renewed rapid disinflation. Several reforms and policy actions were delayed across the fiscal, financial, and energy sectors.

The new authorities have adopted strong corrective measures to address the fiscal impact of 2024 slippages and ensure the fiscal program remains on track, including achievement of a 1½ percent of GDP fiscal primary surplus in 2025. This will be achieved through additional revenue mobilization and expenditure rationalization—while protecting the vulnerable from the impact of policy adjustment. Several public financial management reforms will ensure alignment of spending commitments to available resources—including by strengthening budget controls and undertaking a comprehensive audit of payables accumulated end-2024.

Looking ahead, preserving the integrity of the fiscal policy adjustment is predicated on timely and continued efforts to further strengthen revenue administration, bolster public financial management, and improve State-Owned Enterprises (SOEs) management—including by decisively tackling challenges in the energy and cocoa sectors.

The Bank of Ghana (BoG) has tightened its monetary policy stance to sustain a continued reduction in inflation and has been successful in rebuilding international reserves. The BoG has implemented risk containment measures to support banking system stability. It appropriately intensified monitoring and escalated measures at weak, undercapitalized banks to promote timely recapitalization; strengthen risk management frameworks and practices, including to reduce NPLs; and ensure effective governance. Looking ahead, the authorities are committed to sustaining their efforts to bolster financial stability.

Ambitious structural reforms to help create an environment more conducive to private sector investment, and to enhance governance and transparency remain key to boosting the economy's potential and underpinning sustainable job creation.

The Ghanaian authorities have also continued to make headway on their public debt restructuring. The Memorandum of Understanding (MoU) with Ghana's Official Creditors Committee (OCC) under the G20 Common Framework has been signed by all parties, and the focus is now on finalizing the bilateral agreements to implement the MoU. The authorities are also pursuing good-faith efforts toward reaching agreements with other commercial creditors on debt treatments that are in line with program parameters and the comparability of treatment principles.

Against the backdrop of these policy actions and the progress on debt restructuring, Ghana's credit rating has been upgraded by key international credit rating agencies.

Going forward, staying the course of macroeconomic policy adjustment and reforms is essential to fully and durably restore macroeconomic stability and debt sustainability, while fostering a sustainable increase in economic growth and poverty reduction.

Following the Executive Board discussion on Ghana, Deputy Managing Director Bo Li issued the following statement:

"Faced with large policy slippages and reform delays at end-2024, the new administration has taken bold corrective actions to maintain the program on track. Combined with ongoing reform efforts and an improved external position, the corrective measures are set to support Ghana in reaching the goals of economic stabilization, rebuilding resilience, and fostering higher and more inclusive growth.

"The authorities are strongly committed to restoring fiscal discipline and addressing the structural weaknesses that led to the slippages. They have passed a 2025 budget consistent with the program's objectives and enacted an enhanced fiscal responsibility framework. Looking ahead, staying the course of fiscal adjustment and completing the debt restructuring are key to ensure fiscal sustainability. This should be supported by continued efforts to enhance domestic revenue mobilization and streamline non-priority expenditure, while creating space for development priorities and enhanced social safety nets. Improving tax administration, strengthening expenditure controls, and improving SOEs' efficiency are of the essence to underpin durable adjustment. In this context, forcefully addressing the challenges in the energy sector and addressing related arrears are critical to contain fiscal risks.

"The authorities have made significant strides toward rebuilding international reserves and taken steps to bring inflation down. The Bank of Ghana should maintain an appropriately tight monetary stance until inflation returns to its target, reduce its footprint in the foreign exchange market, and allow for greater exchange rate flexibility, including by adopting a formal internal FX intervention policy framework.

"The authorities have taken intensified actions to address undercapitalized banks. Looking ahead, further strengthening financial sector stability requires fully implementing the plan to strengthen NIB, finalizing the reform strategy to support state-owned banks' viability and sustainability, and developing contingency plans to address weak banks that fail to recapitalize. Stepped-up efforts to improve the crisis management and resolution framework, enhance financial-sector safety nets, and address legacy issues at the specialized deposit-taking institutions are also important."