The International Monetary Fund (IMF) will approve the $3 billion financial package for Ghana in the 4th quarter of this year.

This is when the Fund had agreed a programme with the Government of Ghana.

However, the funds will come in tranches as a balance of payment support. At least, a billion dollars may be released by the Fund by the end of the first quarter of 2023.

In its report dubbed “Ghana's weak external position to strengthen on expected IMF deal”, Fitch Solutions said “despite a widening balance of payments deficit caused by large financial account outflows, we believe that an expected IMF deal will help to support Ghana's external position in 2023”.

“An IMF financial package of $3.0bn, which we expect to be approved in quarter 4, 2022, should alleviate pressure on Ghana's external position in 2023.”

However, some analysts believe a Fund programme will not be approved until at least the end of quarter one 2023.

This is because the Fund is yet to conduct a Debt Sustainability Analysis (DSA) on Ghana's debt.

Net capital flows remain in negative territory

In quarter one, 2022, capital and financial outflows increased by 188.7% year-on-year to $690 million, driven by net portfolio reversals and outflows of Foreign Direct Inflows.

Combined with the country's current account deficit, Fitch Solutions, said this has resulted in an overall balance of payments deficit of $934 million in the first quarter of 2022, as against a deficit of $430 million in quarter one, 2021.

“We expect net capital flows to remain in negative territory over second-half of 2022, given deteriorating investor sentiment towards Ghanaian assets, as reflected by the currency sell-off and rising bond yields. At the same time, Ghana is unable to tap international capital markets to finance the deficit, and this is putting downward pressure on its foreign exchange reserves, which have fallen to $7.7 billion in June, from $9.8 billion in January [2022].”

Finance Minister revises IMF financial package under programme to $3bn

Finance Minister, Ken Ofori-Atta had earlier revealed that Ghana could get about $3 billion from the IMF.

This is higher than the initial one billion dollars disclosed by the Finance Minister to Bloomberg News in July 2022 when the IMF team paid a visit to Accra as part of their economic data gathering exercise.