Ghana, IMF reach SLA; but Board approval of $3bn ECF dependent on…
Government and the IMF have reached a staff-level agreement (SLA) on economic policies and reforms to be supported by a new three-year arrangement under the Extended Credit Facility (ECF) of about $3 billion.
According to government, the ECF programme aims at restoring macroeconomic stability and debt sustainability while protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive recovery.
Adding that the programme, envisages wide-ranging reforms to address structural weaknesses and enhance resilience to shocks.
But despite the SLA reached by government and the IMF, the eventual approval of the ECF programme by the Board of the IMF is dependent on a number of factors.
Speaking at a press briefing on Tuesday, December 13, 2022, IMF Mission Chief to Ghana, Stéphane Roudet, noted that approval of the ECF programme for Ghana by the IMF Board will be dependent on support for government’s Domestic Debt Exchange Programme (DDEP) by creditors (both external and domestic) as well as the ability of the programme to restore Ghana’s debt to a sustainable level.
“Assurances from Ghana’s creditors that they will support the Domestic Debt Exchange Programme and the ability of the programme to sufficiently restore debt sustainability, will the be among the major reasons for which the IMF Board will approve the ECF programme,” he said.
Speaking further, Mr Roudet noted that the IMF is supportive of the DDEP along with all policies being put in place to ensure the success of the debt exchange programme.
“We support all policies and measures being implemented by the government to ensure the success of the DDEP as it will help restore and enhance debt sustainability,” he added.
“Revenue measures and expenditure rationalisation in the 2023 budget is not enough to restore our debts to sustainable levels hence the DDEP, we believe that if we get enough support from our creditors, we will be able to successfully undertake the DDEP,” further stated the Country’s Finance Chief, Ken Ofori-Atta.
