Ghana will secure $1.32 billion from the IMF and World Bank to address 35% of its 2025 budget deficit. The IMF contributes $720 million via its Extended Credit Facility, while the World Bank provides $600 million through its Development Policy Operation. The financing aims to restore macroeconomic stability and ensure fiscal discipline.
The Ghanaian government is set to obtain $1.32 billion in financial assistance from the International Monetary Fund (IMF) and the World Bank, aimed at addressing 35 percent of the country’s budget deficit for 2025. Finance Minister Dr. Cassiel Ato Forson indicated that $720 million will be sourced from the IMF’s Extended Credit Facility (ECF) program, while $600 million will come from the World Bank’s Development Policy Operation (DPO).
The total cash deficit is projected to reach GH¢56.9 billion, necessitating financing through both foreign and domestic sources. It is estimated that foreign net financing will provide GH¢21.4 billion, equivalent to 1.5% of the gross domestic product (GDP). This foreign financing will comprise the aforementioned IMF and World Bank contributions.
To cover the remaining 65% of the budget deficit, which equates to GH¢36.9 billion or 2.6% of GDP, the government plans to engage in domestic borrowing, mainly by issuing short-term treasury bills. The IMF-ECF program aims to facilitate Ghana’s recovery towards macroeconomic stability and enhance the nation’s debt sustainability amidst ongoing fiscal problems.
Moreover, the DPO by the World Bank is intended to endorse policy reforms and bolster economic recovery efforts. Dr. Forson further emphasized the government’s commitment to fiscal discipline and assured that the mobilized funds will be utilized with efficiency and prudence.
In summary, Ghana is poised to receive $1.32 billion from the IMF and World Bank to address a significant portion of its budget deficit for 2025. This funding stems from the IMF’s Extended Credit Facility and the World Bank’s Development Policy Operations. The government plans to finance the remainder of its deficit through domestic borrowing. This support underscores Ghana’s strategy to restore economic stability and uphold fiscal discipline.
Original Source: www.ghanaweb.com
