Ghana has formally requested changes to its IMF-supported Extended Credit Facility (ECF) under the Post-COVID-19 Programme for Economic Growth (PC-PEG), aiming to adjust key performance targets and address evolving economic realities.
The adjustments, which focus on the period through June 2025, are designed to align the program with the country’s shifting macroeconomic landscape.
Among the key changes are modifications to the primary balance performance criteria (PC) and non-oil revenue targets, which will now accommodate higher projected nominal GDP while ensuring fiscal efforts remain consistent relative to the country’s economic output. Additionally, Ghana is seeking to lower the targets for net international reserves (NIR) for March and June 2025 to reflect updated foreign exchange cash flow projections.
In another significant move, Ghana plans to adjust the Monetary Policy Consultation Clause (MPCC) bands upward through mid-2025, a step that takes into account recent macroeconomic trends and projected inflation rates. The government has also refocused social spending monitoring, with an emphasis on ensuring timely transfers to ministries and beneficiaries, an important shift to improve the efficiency of social sector disbursements.
Finance Minister Dr. Mohammed Amin Adam and Bank of Ghana Governor Dr. Ernest Addison outlined the changes in a joint letter to the IMF, stressing that the modifications reflect the country’s evolving macroeconomic conditions, including a higher nominal GDP and increasing debt-related payments, while maintaining the overall integrity of the program. They also introduced an asymmetric adjustor for non-oil revenue, which accounts for a one-time dividend from the Energy Sector Levy Act (ESLA) in December 2024. This adjustment is aimed at capturing exceptional revenue performance.
The government also plans to introduce nine new structural benchmarks (SBs) for reforms vital to achieving the program’s objectives. These reforms, in tandem with the revised performance targets and criteria for December 2025, reinforce Ghana’s commitment to long-term fiscal sustainability and macroeconomic stability.
Despite various challenges, Ghana has performed relatively well under the IMF program. The country met all end-June 2024 performance criteria and indicative targets, and inflation rates have declined more rapidly than expected, remaining within the lower band of the MPCC. This has allowed the Bank of Ghana to reduce its policy rate by 300 basis points in 2024.
Additionally, Ghana has made substantial progress in reducing its fiscal deficit, bringing the primary fiscal balance from a 4.3% deficit of GDP in 2022 to a projected surplus of 0.5% in 2024. While some structural benchmarks have been delayed, there has been continued progress, including the implementation of a new cedi reference rate methodology in September and ongoing efforts to update the taxpayer registry.
In terms of debt management, Ghana has completed its domestic debt restructuring process in 2023 and is continuing efforts to restructure its external debt. The modifications to the NIR floor are designed to accommodate large payments related to the country’s ongoing debt restructuring.
The government reaffirmed its commitment to the IMF program, which is subject to semi-annual reviews. Dr. Adam and Dr. Addison expressed confidence in the program’s direction, noting their commitment to working closely with the IMF to ensure its success and ensure transparent monitoring of progress.
