Finance Minister Ken Ofori-Atta has said government is ready for the task ahead following the approval of US$ 3 billion facility to the country by the IMF.
Speaking at a joint Ghana-IMF news conference from Washington on Thursday (18 May), Ofori-Atta assured Ghana is now on the part to full economic recovery.
“We are already seeing some relative stability in the currency and inflation thanks to the work of the Bank of Ghana,” he said.
He added: “The government of President Akufo-Addo is aware of the enormous task ahead, we’ll be inspired by the momentum that propelled Ghana to attain the staff level agreement, financing assurance from our bilateral creditors and board approval in near record time to implement this 36-month ECF.”
Ghana’s debt restructuring is targeting US$10.5 billion of external debt service relief from 2023 to 2026, the International Monetary Fund (IMF) said late on Wednesday in its Debt Sustainability Analysis.
Ghana’s debt is currently unsustainable, but the country aims to restore it to a “moderate” risk of debt distress by 2028, the fund added.
The IMF’s executive board approved a US$3 billion, three-year rescue loan on Wednesday (17 May), paving a potential path out of the worst economic crisis in a generation for the embattled West African country.
Ghana is overhauling its debt after its already strained finances buckled under the economic fallout from COVID-19 and Russia’s invasion of Ukraine. It is seeking external debt relief under the Group of 20’s Common Framework platform and completed a domestic debt exchange earlier this year.
Ghana has a US$15 billion financing gap in its balance of payments from 2023 to 2026, the IMF said, with the World Bank set to provide US$1.6 billion in budget and balance-of-payments support.
The country has a medium “debt carrying capacity”, which means the IMF requires Ghana to target bringing its public debt-to-GDP ratio from 88.1% at the end of 2022 to 55% by 2028.
“Domestic policy slippages represent a significant downside risk to the projections, further compounded by risks associated to the end-2024 general elections,” the IMF report said.
Other risks for Ghana include social unrest if economic conditions do not improve for the population, not regaining market access to issue debt and the domestic debt exchange posing dangers to domestic financial sector stability, the fund said.