The International Monetary Fund (IMF) has approved Ghana’s application for a $3 billion bailout during a meeting held in Washington DC on May 17.
This approval comes after Ghana secured financing assurance from the Paris Club on May 12. The IMF will hold a press conference on May 18 to provide further details about the program.
The bailout is expected to bring several benefits to Ghana, including attracting investors who are confident that the IMF’s oversight will strengthen economic fundamentals such as inflation and exchange rates.
Additionally, it will help the Bank of Ghana (BoG) bolster its reserves. Last year, the government faced challenges in raising funds from the international capital market, leading to a depletion of BoG reserves by $3.6 billion.
The IMF disbursements will supplement the central bank’s foreign exchange resources.
Furthermore, the IMF will provide technical support to Ghana and assist in ensuring fiscal discipline through the conditions attached to the program.
The program is also anticipated to result in some debt forgiveness from Ghana’s external creditors, freeing up funds for investment in more productive areas.
Additionally, it is expected to contribute to stabilizing the exchange rate, particularly the Cedi against the Dollar, in the foreign exchange market.