Ghana and the International Monetary Fund (IMF) have finalized a staff-level agreement on the fourth review of its $3 billion loan program, which is set to unlock $370 million once approved by the IMF’s executive board.

The West African nation, a major producer of gold, oil, and cocoa, is recovering from its worst economic crisis in decades, which led the government to restructure its debt.

Despite a significant decline in performance under the program by the end of 2024, the IMF noted that Ghana’s government has since taken corrective actions to address policy and reform gaps.

President John Dramani Mahama’s new administration, which took office in January following the elections, has implemented bold measures to resolve policy issues and ensure the program remains on track.

Challenges included unpaid bills, an inflation rate surpassing targets, and delays in key reforms and policies across various sectors. To address these, the government has initiated an audit of outstanding payments to assess the extent of the fiscal slippages.

While the primary budget recorded a deficit of 3.25% of GDP, against the target of a 0.5% surplus, the government has adopted a revised budget for the year aiming for a primary surplus of 1.5% of GDP.

To combat rising inflation, the central bank has raised its main interest rate and is reassessing its liquidity management. These tightening monetary policies, along with ongoing fiscal consolidation, are expected to reduce inflation.

Although Mahama had promised during his campaign to renegotiate the terms of the IMF program, Finance Minister Cassiel Ato Forson clarified that the government is fully committed to adhering to the existing program, stating that renegotiation would imply a lack of confidence in the program’s terms.