Dr Mohammed Amin Adam, Finance Minister, has disclosed exclusively to the Ghana News Agency that the country is waiting to sign a Memorandum of Understanding (MoU) with its official bilateral creditors next week.
He said the country had agreed to all that was needed for the second review to go to the IMF Board in June, adding “we’re waiting for the draft next week to sign.”
He said this on the margins of the launch of the 2025 Africa Prosperity Dialogues in Accra.
The signing of the MoU is critical for Ghana to get its third tranche US$360 million from the International Monetary Fund (IMF), having reached a Staff Level Agreement with the Fund’s Mission Team in April this year.
It forms part of efforts by the government to restructure some US$13 billion external debt to meet debt sustainability parameters under the ongoing Extended Credit Facility (ECF) programme.
The IMF Executive Board is expected to meet next month (June) to consider the second review and approve the country’s third tranche, paving way for the disbursement of US$360m to the country.
Signing the MoU, together with the disbursement of the US$360m, would be critical in stabilising the Cedi against its major trading currencies, particularly, the Dollar.
At the time of reaching the agreement of the second review of the programme, Dr Ernest Addison, Governor, Bank of Ghana (BoG), expressed confidence that the US$360m would help shore up the country’s foreign currency reserves.
According to the World Economic Forum, foreign currency reserves, comprising cash and other assets are important in maintaining stability of domestic currencies and providing liquidity during economic crisis.
Professor Godfred Alufar Bokpin, an Economist with the University of Ghana, has stated that the development would go a long way to help in stabilising the Cedi, which has been experiencing some depreciation in recent times.
He noted that a vacuum has been created because the country had not signed an MoU with its bilateral creditors, though it reached an agreement in principle in January 2024.
However, the finance professor said a positive news with the IMF Board approval of the US$360m would engineer some confidence in the economy as people would trade their Dollars, which would lead to some relative stability.
Meanwhile, speaking at the second quarter CEOs Breakfast Meeting earlier this week, Dr Stephen Amoah, a Deputy Finance Minister, advocated high patronage of domestic tourism and hospitality centres.
The tourism and hospitality is among Ghana’s top four sector contributors of foreign exchange inflows, as such, he said a high patronage would help in keeping money in the country to contain the depreciation of the Cedi.
He, therefore, encouraged Ghanaians to patronise domestic tourism, saying, “let’s begin to show that high level of patronage and keep the money here… if you stay here, [and] the dollar people come, they will demand our currency.”
GNA
CA/
May 18, 2024
