Ghana is set to begin a new phase of engagement with the IMF - Finance Ministry

Ghana has officially entered a new phase of engagement with the International Monetary Fund (IMF) following the successful completion of its US$3 billion Extended Credit Facility (ECF) programme, with the country now transitioning to a 36-month Policy Coordination Instrument (PCI).

Unlike the ECF, the new Policy Coordination Instrument is not a bailout programme and does not provide direct financial support. Instead, it is designed to help Ghana sustain key economic reforms, strengthen policy credibility and reinforce investor confidence as the country continues its post-crisis economic recovery.

On Monday, July 27, the IMF Executive Board approved the sixth and final review of Ghana's Extended Credit Facility programme, bringing the three-year bailout programme launched in May 2023 to a successful conclusion.

The approval unlocks a final disbursement of approximately US$371 million to the Bank of Ghana, bringing total disbursements under the programme to the full US$3 billion approved by the IMF.

The programme was introduced to help restore macroeconomic stability after Ghana's 2022 economic crisis, which was characterised by soaring inflation, rapid currency depreciation, rising public debt and declining investor confidence.

In a statement issued on Monday, July 27, the Ministry of Finance said the successful completion of the programme demonstrates the significant progress Ghana has made in restoring economic stability.

According to the Ministry, the government has:

• Maintained fiscal discipline.
• Reduced inflation significantly.
• Strengthened external reserves.
• Implemented major structural reforms.
• Laid the foundation for sustainable economic growth.

The Ministry described the completion of the ECF programme as an important milestone in Ghana's economic recovery journey.

Following the conclusion of the bailout programme, Ghana will now work with the IMF under a 36-month Policy Coordination Instrument (PCI).

The PCI is a non-financing policy support programme that enables countries to continue implementing economic reforms without receiving direct IMF loans.

Instead, it provides:

• Technical assistance.
• Policy guidance.
• Regular economic assessments.
• Capacity development.
• Independent monitoring of reforms.

The Ministry of Finance said the PCI will support the government's reform agenda while helping sustain confidence in Ghana's economic policies.

Government has explained that although the PCI does not include financial assistance, it serves as a strong signal to international investors, development partners and credit rating agencies that Ghana remains committed to prudent economic management.

Earlier, the Minister of Government Communications, Felix Kwakye Ofosu, described the PCI as a form of technical assistance engagement with the IMF.

According to him, the arrangement is intended to help Ghana continue implementing sound economic policies while unlocking new opportunities for investment.

The PCI does not provide financial bailout, but will offer continuous capacity development, confidence boost to the market, and deliver a catalytic effect for fresh financing to Ghana," the statement noted.

Government believes the Policy Coordination Instrument will complement ongoing efforts to restore Ghana's investment-grade credit rating.

According to official projections, achieving investment-grade status could:

• Reduce sovereign borrowing costs.
• Lower financing costs for businesses.
• Attract long-term institutional investors.
• Increase foreign direct investment (FDI).
• Unlock cheaper financing for infrastructure projects.
• Support private-sector growth.

Officials say these outcomes would contribute to faster economic expansion, job creation and improved living standards.

The Ministry of Finance expressed appreciation to Ghanaians for their support throughout the implementation of the IMF-supported programme.

Government expresses its sincere appreciation to the people of Ghana for their resilience, patience, and unwavering support throughout the reform programme."

The Ministry also acknowledged the contribution of the IMF Executive Board, IMF management and staff, development partners, civil society organisations and the private sector for supporting Ghana's economic recovery efforts.

With the bailout programme now completed, government says its priority is to preserve the macroeconomic gains achieved over the past three years while continuing reforms that promote long-term economic resilience.

The new Policy Coordination Instrument is expected to provide a framework for maintaining fiscal discipline, strengthening public institutions, improving investor confidence and ensuring sustainable economic growth without additional IMF financial assistance.