Second tranche of IMF cash hits BoG’s account

The second tranche of IMF cash has hit the Bank of Ghana’s (BoG) account today January 23, 2024.

This is what Joy Business has picked up from persons with knowledge of the IMF programme.

The IMF Mission Chief for Ghana, Stephane Roudet at the Joint Press Conference between the IMF, Ministry of Finance and Bank of Ghana last Friday disclosed that the $600 million will be disbursed to the accounts of the BoG “in a matter of hours”.

Also read: Ghana to receive second tranche $600m IMF disbursement – Finance Minister

However, Joy Business is learning that the money hit the BoG’s account today January 23.

Why the disbursement?

The IMF Executive Board last Friday, January 19, 2024, approved the transfer of some $600 million to Ghana.

This was after Ghana completed the 2023 Article IV consultation and the first review of Ghana’s 36-month Extended Credit Facility arrangement. Approval of the first review enables the immediate disbursement of SDR 451.4 million (about US$600 million).

According to the IMF, Ghana’s performance under the program has been strong. All quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met.

Also read: Ghana’s economic programme is beginning to bear fruit – IMF boss

The IMF Executive Board added that the authorities’ reforms are bearing fruit, and signs of economic stabilisation are emerging. Growth in 2023 has proven resilient, inflation has declined, and the fiscal and external positions have improved.

Progress is also being made on debt restructuring, with the domestic debt exchange completed over the summer and an agreement recently reached on the restructuring of official bilateral debt.

Impact of this disbursement

The immediate impact of this disbursement will be the Bank of Ghana’s International Reserves, as it will put it in a strong position to support the local currency. Some market analysts have also argued that it will go a long way to help stabilise the Ghana cedi.

The second tranche of funds will be advanced towards supporting some projects in the budget.

This represents a departure from the past when “IMF cash” was primarily set aside for Balance of Payment Support for the country.

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