Editorial: Approval of Ghana’s bailout request looks promising

Finance Minister Ken Ofori-Atta, in a presentation last week Thursday in Washington, said Ghana expects the International Monetary Fund’s board to approve a US$3billion loan in May.

Mr. Ofori-Atta said that official creditor financial assurances are expected by May, and that the country’s domestic debt exchange programme will yield GH¢38billion of debt service savings in 2023.A memorandum of understanding with official creditors and an agreement in principle on Eurobond restructuring are expected by July, with a 2030 Eurobond partially guaranteed by the World Bank included in the restructuring, the minister added.

Government aims to bring rampant inflation down to 8% in the medium-term, and is targetting real GDP growth of 5% over the same period.

Mr. Ofori-Atta and Bank of Ghana Governor Dr. Ernest Addison led a high-level Ghana delegation to the World Bank and IMF Spring Meetings in Washington D.C. last week.

He indicated that access to the international capital market is key on the agenda of government to restore macroeconomic stability.

Meanwhile, government has outlined various ambitious macroeconomic objectives in the medium-term as part of securing a programme from the International Monetary Fund.

These include: reaching a 1.5% of Gross Domestic Product primary surplus in the medium-term; bringing inflation below 8% in the medium-term; and restoring external buffers with gross international reserves reaching 3 months of import cover by 2026.

Ghana’s inflation reached a more than two-decade high of 54.1% in December but has since slowed, falling to 45% year-on-year in March.

Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva also expressed optimistism that the fund’s Executive Board will soon grant final approval to Ghana’s bailout request.

She indicated that her optimism stems from the swelling goodwill that the country is getting from the international community, including its creditors.

Ms. Georgieva said her outfit is pushing bilateral creditors to quickly provide the financial assurance needed for the board to approve the deal.