The International Monetary Fund (IMF) approved a $3 billion loan for Ghana, a West African country in the grip of a severe economic crisis, with a $600 million early release.
The IMF board approved the program, which is spaced out over 36 months through the Extended Fund Facility.
It aims to “restore macroeconomic stability and debt sustainability, as well as implement broad-based reforms to build resilience and lay the groundwork for stronger and more inclusive growth,” according to IMF Managing Director Kristalina Georgieva.
She stated that “fiscal consolidation is a key component of the program,” as is “maintaining financial sector stability.”
Furthermore, “the program’s monetary and exchange rate policies will focus on inflation control and the rebuilding of foreign exchange reserves.”
Finally, Kristalina Georgieva stated that “an ambitious program of structural reforms is being implemented to revitalise private sector-led growth by improving the business environment, governance, and productivity.”
The IMF stated on Friday that Ghana has offered adequate guarantees to benefit from an aid plan, praising its creditor countries, led by France and China, for their recent agreement to begin debt restructuring negotiations.
Weakened by the repercussions of the war in Ukraine, Ghana decided to call on the IMF and in December reached a pre-agreement with the institution to obtain 3 billion dollars in loans spread over three years and conditional on the implementation of economic reforms.
A major producer of cocoa and gold, Ghana also has gas and oil reserves, but its debt burden has exploded, as in other sub-Saharan African countries, under the impact of the Covid-19 pandemic and the Ukrainian conflict.
This crisis, the worst in decades, has forced President Nana Akufo-Addo to reverse his past positions by turning to the IMF to stave off the spectre of default raised by some economists.
