Ghana’s bilateral creditors close to issuing MoU to aid IMF Board meeting on Ghana – World Bank Country Director

The World Bank Country Director, Pierre Frank Laporte, has revealed that the country’s bilateral creditors are close to “Issuing an Assurance” that will aid the IMF Board meeting on Ghana, come January 11, 2024.

Mr. Laporte said “At this point the information that we have is that the Official Creditor Committee is close to reaching a deal with Ghana on its debt restructuring”.

According to him, “It is for this reason why the  IMF has gone ahead to schedule the January 11, 2024 date”.

The disclosure by Mr Laporte is coming at a time that concerns have been raised about the new date the IMF is scheduled to have a board meeting to assess the second review of Ghana’s performance under the Fund programme and approve the disbursement of $600 million bailout package for the country.

It is also coming after the IMF was not able to meet on Ghana’s programme in November 2023,  the first week in December and December 21 2023 respectively.

Persons close to the IMF had explained to Joy Business this was due to concerns expressed by one of the members of the Official Creditor Committee.

This meant they could not secure the much-needed Memorandum of Understanding or “Letter of Comfort” for the IMF Board to meet in November 2023 or December 2023 respectively.

The IMF needs this financing assurance from the bilateral creditors that they will participate fully in Ghana’s programme by agreeing to the debt restructuring.

World Bank’s role in Ghana’s IMF Programme

The World Bank is expected to provide some financial support to complement the assistance coming from IMF under the Fund programme.

Therefore, the Bank is working with the IMF to ensure that the necessary pre-conditions are met by Ghana before the necessary financial assistance is given.

The World Bank as such is waiting for Ghana to pass the second review under the Fund programme, before its component of funding is advanced to the country.

The World Bank is expected to provide some $300 million in budget support to Ghana, after the IMF board approves the $600 million for Ghana.

Mr. Laporte added his outfit is waiting for the IMF Board meeting to take place for the World Bank to quickly move to get the needed approval from its board to disburse the $300 million to support programmes in Ghana’s budget.

The World Bank was supposed to have advanced this budget support to Ghana last month.

Mr. Laporte pointed out that “As soon as the IMF board approves the second tranche disbursement, the World Bank will also move”.

He also revealed that another set of disbursements will be advanced to Ghana before the end of next year.  The World Bank will also make available its funding component to the Ghana Stability Fund very soon.

Reason behind rescheduling IMF board meetings?

There have been concerns and even debates about whether Ghana’s inability to meet some programme targets were the main reason why the IMF board could not meet in November 2023 and even December 2023.

But the World Bank Country Director debunk it, saying, the change in board dates had nothing to do with Ghana not meeting those targets needed to facilitate the board meeting in Ghana.

He added that this is not the fault of Ghana “In fact we are very disappointed with some members of the Official Creditor Committee, because Ghana has met all the requirements, the reforms, and met all the prior  actions to get the board meeting”.

Mr. Laporte noted that “Some of these technical issues and developments had delayed the board meeting and disbursement to Ghana” which can be described as unfortunate.

How much will Ghana get under the IMF programme?

Ghana is expected to get $3 billion under the IMF programme.

An official release from the IMF Ghana showed that the IMF Executive Board approved, on May 17, 2023, an SDR 2.242 billion (about $3 billion) 36-month Extended Credit Facility (ECF) arrangement for Ghana.

This decision enabled an immediate release of $600 million, equivalent to SDR 451.4 million. The rest is expected to be disbursed in tranches every six months, following programme reviews approved by the IMF Executive Board.