The Executive Board of the International Monetary Fund (IMF) is set to meet today in a move that could unlock a final disbursement of about US$318 million for Ghana. The approval of Ghana's sixth and final review under the Extended Credit Facility (ECF) programme is expected to bring to a close the country's three-year ECF programme.
Ghana Awaits IMF Approval for Final ECF Tranche
Ghana has already met key quantitative and structural targets required for Board approval, including decisions on the recapitalisation and governance reforms of UMB Bank and Prudential Bank. These actions were agreed upon under the programme, and government has since met the necessary requirements.
The approval of the review will formally conclude the country's three-year ECF programme, which was entered in May 2023 with access to about US$3 billion to help restore macroeconomic stability, implement fiscal reforms, and support the country's debt restructuring programme.
Transitioning to Policy Coordination Instrument
The IMF Board is also expected to consider and approve Ghana's request for a 36-month Policy Coordination Instrument (PCI), a non-financing arrangement that will guide the country's economic reforms after the conclusion of the IMF bailout programme. Unlike the ECF, the PCI does not provide direct funding, but rather offers closer policy engagement with the IMF and signals a country's commitment to reforms.
The PCI is designed to help countries maintain macroeconomic stability, build resilience against external shocks, address structural imbalances, and support sustainable economic growth. Ghana's Finance Minister, Dr Cassiel Ato Forson, has already indicated that the country is preparing to transition from the ECF to the PCI to preserve recent macroeconomic gains and deepen structural reforms.
Focus on Six Priority Areas
The new programme will focus on six priority areas: growth-friendly fiscal consolidation, debt sustainability, fiscal transparency and governance, stronger monetary and exchange rate policy frameworks, financial sector stability, and economic diversification. Dr Forson said the PCI would help preserve the gains achieved under the IMF-supported programme while reinforcing investor confidence and policy credibility.
What Happens Next
The Finance Minister has already indicated that Ghana is preparing to transition from the ECF to the PCI to preserve recent macroeconomic gains and deepen structural reforms. The country is expected to press ahead with reforms in the energy sector, particularly efforts to improve efficiency at the Electricity Company of Ghana through private sector participation. The transition to the PCI marks an important milestone in Ghana's economic recovery, and the country's commitment to reforms is expected to strengthen investor confidence and attract support from development partners.
Source: Joy Online
