The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has assured that Ghana will secure the second tranche of the International Monetary Fund (IMF) bailout package and the cocoa syndication loan before the end of 2023.
“I can tell you from the last briefing that we had; things are moving relatively well when it comes to Ghana securing the second tranche of the IMF cash”, he emphasised.
Dr. Addison is however worried about developments around the restructuring of Zambia’s bonds and how it could impact on Ghana’s discussion with the Official Creditor Committee.
“On the Zambia situation, creditors cannot agree on who should take a bigger haircut. Should it the bilateral creditors or the bond holders? We are hoping that this will not happen in the case of Ghana so we can finalise discussion on time”.
Even though, there are some fears that Ghana may not secure the funds on time, Dr. Addison insisted that the process is going on well.
On the Cocoa Loan Syndication, he disclosed that discussions with Ghana Cocoa Board (COCOBOD) point to a positive outcome by the end of the year.
He stated that there are mitigating measures the Bank of Ghana can trigger to stabilise the cedi even if the COCOBOD funds delay.
“We expect the disbursement [cocoa syndication loan] to be done sooner rather than later”.
Ghana’s IMF Programme
The IMF Board was expected to meet on November 22, 2023 to consider Ghana’s first programme review and staff report.
However, the date was moved to November 27, 2023 and later to the first week in December 2023.
This was after one of the partners of the Official Creditor Committee raised some concerns about the cut of date for restructuring Ghana’s debts.
However, government has maintained that it remains optimistic about dealing with all the problems to secure the IMF Funds before the end of this year.
Dr. Addison is optimistic about the outlook of the cedi in the coming weeks.
“Excluding the sharp depreciation of 20.6% in January, the Ghana cedi has cumulatively depreciated by 6.6% against the US dollar between February and November 20, 2023”, he announced.
He added that the relative stability in the foreign exchange market has largely been supported by inflows from the IMF ECF first tranche, the Domestic Gold Purchase Programme, as well as purchases of repatriated export proceeds from mining companies and oil and gas producers.
Bank of Ghana’s Monetary Policy outlook
The Monetary Policy Committee after its last meeting in 2023, kept the policy rate at 30.0%.
This is the second consecutive time this year that the Bank of Ghana has kept its rate unchanged.
The committee at its last meeting in September 2023 left the rate at 30%.
Some observers have said with inflation declining it was perharps time to reduce the policy rate.
Dr. Addison however noted that “although inflation is decelerating, it remains high relative to target and therefore there is the need to keep the policy rate tighter for longer until inflation is firmly anchored on a downward trajectory towards the medium- term target”.