Ghana and the International Monetary Fund (IMF) have reached a preliminary agreement for the injection of $3 billion over the following three years.
The IMF's assistance and related programmes are intended to stabilise the economy and address the fiscal and monetary imbalances that led to the depreciation of the Ghana cedi and an increase in the cost of goods and services.
Yesterday, the government side and the IMF Mission jointly convened a news conference to announce the staff-level agreement (SLA) for an extended credit facility (ECF).
The agreement marks the nation's first significant step toward gaining access to financial and technical assistance from the Bretton Woods institutions.
a body to revive the economy.
Caveat
However, before the management and the Executive Board of the IMF can approve the contract for a tranched release of the funds to start, the government would now need to provide adequate proof that it has implemented real measures to bring the debt to manageable levels.
Stéphane Roudet, the head of the IMF mission in Ghana, said in a statement announcing the SLA yesterday that the preliminary approval would be presented to the IMF Management and Executive Board for final approval once Ghana had made appreciable and sufficient progress in its efforts to restore debt sustainability.
The final IMF approval is also dependent on Ghana's partners and creditors providing the required funding guarantees.
Once more, the nation must implement policies to promote domestic resource mobilisation and reduce spending.
"The authorities have announced a thorough debt restructuring to help achieve the goal of restoring national financial sustainability. Before the proposed fund-supported programme can be submitted to the IMF Executive Board for approval, sufficient assurances and advancement on this front will be required "said in the IMF statement.
function of creditors
Following five months of negotiations, the government and IMF announced the SLA. These negotiations were over a set of policies and programmes required to restore debt sustainability and general macroeconomic stability, which is necessary for prices and the local currency to stabilise.
The Mission Chief for Ghana stated yesterday in Accra at the joint press conference of the IMF and the Ministry of Finance that the government's next important step was to obtain the assurance of the nation's creditors.
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Ghana and the International Monetary Fund (IMF) have reached a preliminary agreement for the injection of $3 billion over the following three years.
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