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By Christian Akorlie and Emmanuel Bruce
ACCRA (Reuters) -Ghana and the International Monetary Fund have reached a staff-level agreement on the fourth review of its $3 billion loan programme, the IMF said on Tuesday, which is set to unlock $370 million upon approval by the Fund's executive board.
The West African gold, oil, and cocoa producer is recovering from its most severe economic crisis in decades, which forced the government to restructure its debt.
Ghana's overall performance under the programme had deteriorated markedly at the end of 2024, the IMF said in the statement, but the government had since taken measures to address policy and reform shortfalls.
"The new authorities have taken bold measures to address policy slippages and ensure the program objectives remain within reach," it said, referring to the new government of President John Dramani Mahama, which took over in January after an election.
The shortfalls include an accumulation of bills and an inflation rate that exceeded a set target. Some reforms and policy actions in various sectors were also delayed, the IMF said.
"On the fiscal front, the government has launched an audit of the payables to firm up the size and nature of the slippages," it said.
The primary budget posted a deficit of 3.25% of GDP, the IMF said, against a target of a surplus of 0.5% of GDP. The government has since adopted a budget for this year, which targets a primary surplus of 1.5% of GDP, the IMF said.
Monetary policymakers have raised the main interest rate in order to coax inflation downwards, the IMF said, and the central bank is reviewing its liquidity management operations.
"The ensuing tightening in the monetary policy stance, together with the ongoing fiscal consolidation, is expected to bring inflation down," it said.
Mahama had promised to renegotiate the terms of the IMF programme during campaigns, but his government has rowed back on that pledge.
"Renegotiating pre-supposes that you don't believe in the parameters of the programme... that is not the position of the government," Finance Minister Cassiel Ato Forson told a joint press conference with the IMF in Accra.
"The government is fully committed to implementing this programme."
(Reporting by Christian Akorlie and Emmanuel Bruce; Writing by Anait Miridzhanian and Duncan Miriri; Editing by Alexander Winning and Emelia Sithole-Matarise)
