The government has been insisting in the last few days that it had not missed a November 1st IMF timeline for the fulfillment of conditions to trigger the disbursement of the second tranche of $600 million.
In a statement responding to a Myjoyonline publication, the Finance Ministry claimed there is no November 1, 2023 timeline for disbursement of the second tranche of the IMF funds and that the timeline has not been missed.
So did the government miss a November 1st IMF specified timeline or not?
We have details from multiple IMF documents detailing the timeline and highlighting government’s main challenge in meeting a critical condition.
The Ministry made a number of claims in the November 10 press release.
There is no 1st November 2023 timeline for the disbursement of the second tranche of the IMF funds
This is FALSE. There is a November 1 timeline with two conditions to be met by the government to trigger the release of $600 million. This is both on Page 45, table 9 and page 72, table 1 contained in the official IMF programme document for Ghana.
In Table 9 of page 45 titled; Ghana: Access and Phasing Under the Arrangement, 2023-26, there are two conditions government of Ghana is expected to meet to trigger the release of the second tranche of $600 million.
First: The observance of end-June 2023 performance criteria.
Second: Is to complete the first review.
No deadline has been set by the IMF for the second tranche disbursement, which is due to take place after the IMF Executive Board approves the first review.
Myjoyonline never used the word ‘deadline’ in the story. One may notice the Ministry imported the word deadline when they had acknowledged in their first sentence that Myjoyonline’s reference was to ‘timeline’.
So in the first sentence, the Ministry’s statement says ‘timeline’. In the very next sentence, it talks of a ‘deadline’. The fact is, the IMF specified a timeline for a series of conditions to be fulfilled to trigger the release of funds.
In this case, that timeline was specified as November 1, 2023, by which date Ghana should have fulfilled two conditions:
Observance of end June 2023 performance criteria
Completion of the first review
It is only when Ghana fulfills these – according to the IMF on page 45 [Table 9] and page 72 [Table 1] – that the fund will release the second tranche of $600 million.
Source: IMF Programme document [Page 45]
The publication by Myjoyonline references Table 9 on page 72 of the Memorandum of Economic and Financial Policies (MEFP) published on 17th May 2023 by the IMF.
FALSE! There is nothing like Table 9 on page 72 in the official IMF extended credit facility programme document published on 17th May, 2023.
The November 1 stated in this table is an indicative timeline for completion of the first review, based on the observance of the end-June 2023 performance criteria. This first review was successfully completed on 6th October, 2023, culminating in a Staff Level Agreement (SLA) on the same day.
This is FALSE! At best, it’s misleading.
First, the IMF’s press release issued on October 6, 2023, titled ‘IMF Reaches Staff-Level Agreement on the First Review of the Extended Credit Facility and Conducts Discussions of the 2023 Article IV Consultation with Ghana’ which the Finance Ministry’s statement refers to indicated that;
“Ghana will have access to about US$600 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board. To ensure timely completion of the review, the country needs official creditors to quickly reach an agreement on a debt treatment in line with the financing assurances they provided in May 2023.”
From this direct quote, the review is not complete by any stretch of the Finance Ministry’s imagination. According to the IMF itself, for “the timely completion of the review the country needs official creditors to quickly reach agreement on a debt treatment in line with the financing assurances they provided in May 2023.”
Again in that same release, Stéphane Roudet, the IMF Mission Chief for Ghana stated “This staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received.
Stéphane Roudet, IMF Mission Chief for Ghana
An agreement with official creditors on a debt treatment in line with programme parameters would provide the needed financing assurances. Upon completion of the Executive Board review, Ghana would have access to SDR 451.4 million (about US$ 600 million)”
So the IMF Mission Chief for Ghana again emphasizes the point in direct contradiction of the ministry’s claim of having successfully completed the first review, in stating emphatically that the SLA is subject to IMF Management and Executive Board consideration which is dependent on “the necessary financing assurances” and “an agreement with official creditors on a debt treatment” which will trigger the release of the second tranche of 600 million dollars. The IMF Mission chief himself says that categorically.
The question to ask the finance ministry is, if they had indeed “successfully completed” the first review and there was no other condition, why has the IMF still not disbursed the $600 million?
The Myjoyonline.com story was accurate in referencing the timeline stated in the IMF programme document for the fulfilment of conditions and the disbursement of the second tranche by November 1 2023.
Again, to emphasize the point that Ghana has not completed a successful review to trigger the release of the second tranche, Mr. Roudet stated in that same press release;
“In light of Ghana’s compelling performance under the Fund-supported programme, the critical next step is to secure an agreement with official creditors on the terms of a debt treatment consistent with the IMF Executive Board-approved programme parameters and debt targets. We urge official creditors to move forward and agree on an appropriate debt treatment in line with the financing assurances they provided in May 2023.”
To be clear, this condition to trigger the disbursement of the $600 million was referenced at least 3 times in the IMF press release announcing the SLA on October 6.
This is the reason, the November 1 timeline stated in the IMF programme document has been missed because Ghana is yet to secure what the IMF describes as an “agreement on a debt treatment” with our external creditors in line with the financing assurances they provided in May 2023.
In fact, the Ministry’s statement acknowledged this point when they stated that “External debt restructuring negotiations are progressing smoothly.”
They stressed that “the government of Ghana is making good progress in accordance with its strategic plan to engage the Official Creditor Committee (OCC) of the Paris Club; secure a Memorandum of Understanding on debt restructuring; and go before the IMF Executive Board for approval of the first review.”
Myjoyonline only reported the facts as it relates to the timeline specified in the IMF programme document for Ghana published on 17th May 2023 that details the conditions to unlock the remaining funds.
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