The International Monetary Fund (IMF) has approved a $3bn three-year loan facility for Ghana.
The development was announced on Wednesday after IMF’s executive board approved the facility for the country.
According to IMF, the Extended Credit Facility loan will allow for an immediate disbursement of about $600m.
Kristalina Georgieva, managing director of IMF welcomed the agreement with Nana Akufo Addo-led administration following a commitment by Ghana’s creditors to assist the country’s debt sustainability.
“Today’s decision is also a major milestone for the G20 Common Framework. The commitment by the official creditors’ committee to help make Ghana’s debt sustainable was essential to the Fund’s approval of the program,” she said.
The loan deal comes with tough terms and strict provisions that include increasing taxes and imposing losses on domestic investors in the country.
“Key policies under the authorities’ program include large and frontloaded fiscal consolidation to bring public finances back on a sustainable path, complemented by efforts to protect the vulnerable. The adjustment effort will be supported by ambitious structural reforms in the areas of tax policy, revenue administration, and public financial management, as well as steps to address weaknesses in the energy and cocoa sectors.
“Appropriately tight monetary and flexible exchange rate policies will help bring inflation back to single digits and rebuild international reserves. The program also has a strong focus on preserving financial stability and encouraging private investment and growth,” IMF said.