Ghana secures $1.2bn IMF disbursement after cocoa revenue slump and Eurobond restructuring delays

Ghana secured a $1.2 billion disbursement from the International Monetary Fund on Wednesday, the third and fourth tranches of its three-year, $3 billion Extended Credit Facility approved in May 2023. The IMF Executive Board authorized the release after Ghana met key quantitative targets and structural benchmarks despite setbacks from a cocoa revenue slump and delays in Eurobond restructuring, officials said.

Each tranche is approximately $600 million and is released following semi-annual programme reviews contingent on Ghana meeting key quantitative targets and structural benchmarks. With this latest release, Ghana’s total receipts under the ECF have reached about $2.4 billion, leaving roughly $600 million remaining to be disbursed over the life of the programme, IMF documentation shows.

The combined $1.2 billion disbursement represents the third and fourth tranches of Ghana’s three-year, $3 billion Extended Credit Facility (ECF) arrangement with the IMF, which was approved by the IMF Executive Board in May 2023, according to IMF officials.

The funds are intended to support Ghana’s budget and balance of payments, including strengthening the Bank of Ghana’s reserves and covering external financing gaps, officials said. The IMF programme is designed to restore macroeconomic stability, ensure debt sustainability, and rebuild external buffers while safeguarding social and priority spending, according to the Ministry of Finance’s 2024 IMF–World Bank Annual Meetings investor presentation. Disbursements are tied to Ghana’s adherence to fiscal targets, monetary policy commitments, and progress on debt restructuring milestones, the presentation adds.

Ghana’s cocoa sector, a major source of foreign-exchange earnings, has suffered a significant revenue slump this year, officials said. The Ghana Cocoa Board (COCOBOD) typically secures large annual pre-export syndicated loans—around $1.2 billion in previous years—to finance cocoa purchases and support foreign-exchange inflows, according to market reports. However, a combination of lower cocoa output and price shocks has reduced expected export revenues, widening Ghana’s external financing gap and increasing reliance on official financing from the IMF, World Bank, and other partners, IMF sources confirmed.

The country is also engaged in a sovereign debt restructuring process following its 2022 declaration that it could no longer service most external debt. This restructuring includes Ghana’s international Eurobonds. The IMF programme requires “financing assurances” from Ghana’s external creditors, including official bilateral creditors and private bondholders, to ensure sufficient debt relief and restore debt sustainability, according to IMF officials. While progress with official creditor committees has advanced, negotiations with Eurobond holders have been slower than initially anticipated, delaying the conclusion of comprehensive external debt treatment and affecting the timing of some programme decisions, sources said.

Despite these delays, the IMF Executive Board authorized the release of the combined $1.2 billion tranche after Ghana met the required performance criteria. The delays in Eurobond restructuring have underscored the importance of IMF disbursements and concessional financing as interim support while Ghana’s access to international capital markets remains effectively closed, officials noted.

Ghana’s fiscal policy has been marked by persistent deficits, overspending, and structurally weak domestic revenue mobilization, contributing to rising debt levels prior to the IMF programme, according to economic analyses and Ministry of Finance reports. The Bank of Ghana plays a central role in stabilization efforts, with the IMF programme imposing limits on monetary financing of the budget and requiring measures to rebuild net international reserves. Discussions within Ghana have explored coordinated approaches involving the Bank of Ghana and COCOBOD, such as domestic money creation backed by future cocoa foreign-exchange inflows, to address liquidity pressures, sources said.

Before the current IMF arrangement, Ghana relied heavily on Eurobonds and cocoa-linked external borrowing, making the country vulnerable when global financial conditions tightened and commodity earnings weakened. The IMF programme aims to replace expensive market borrowing with concessional support, conditional on fiscal consolidation and debt restructuring, to restore market confidence over time, according to programme documents.

Looking ahead, the $1.2 billion disbursement provides near-term external liquidity to help Ghana manage the combined shocks of lower cocoa revenue and delayed Eurobond market access, IMF officials said. Continued access to the remaining $600 million tranche will depend on Ghana maintaining fiscal discipline, completing debt negotiations—including with Eurobond holders—and meeting structural reform milestones. Successful implementation is expected to support a gradual decline in the debt-to-GDP ratio, lower domestic interest rates over time, and an eventual return to international capital markets once debt is placed on a sustainable path, according to the IMF and Ghanaian authorities.

Ghana’s medium-term strategy emphasizes the importance of export diversification and stronger domestic revenue mobilization to mitigate the impact of volatile commodity revenues, particularly cocoa, and external debt servicing challenges. Alongside IMF support, Ghana is seeking additional financing from the World Bank, other multilateral institutions, and private capital once restructuring is resolved, the Ministry of Finance’s investor presentation shows.