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Ghana might run out of foreign currency if an IMF agreement is not reached, according to Joe Jackson. || GHKNOBS

Ghana might run out of foreign currency if an IMF agreement is not reached, according to Joe Jackson. || GHKNOBS

 Financial analyst Joe Jackson has discussed the potential repercussions that Ghana would experience if the nation is unable to quickly get an Extended Credit Facility sponsored program from the IMF.

He claims that if the government fails to obtain the US$3 billion financial rescue from the Fund, it might run out of foreign exchange reserves.

The Director of Financial Services at Dalex Finance stated that Ghana's Gross International Reserves (GIR) decreased from $9.8 billion in January 2022 to US$5.9 billion in February 2023 in a message posted on Twitter.

Joe Jackson highlighted the drop reflects just 2.8 months of import cover while presenting some evidence to support the possible deficit, noting that the minimum should be three months of import cover.

The Government of Ghana had originally anticipated receiving Board Level clearance from the IMF, but it was unable to do so since Ghana was not on the agenda for any of the IMF Board meetings scheduled for the remainder of March 2023.

Ken Ofori-Atta, Ghana's minister of finance, issued a warning in February of this year about the repercussions if Ghana did not make significant progress toward obtaining the $3 billion rescue it is requesting from the IMF by the end of March 2023.

He claims that if the government does not present the money by March with a specific plan, the economic collapse of 2022 may occur once again.

But after recent talks at the IMF/World Bank Spring talks in Washington, DC, USA, Ghana just recently finished the preparatory activities necessary to gain a Board-Level approval with the Fund, forcing a revision of that schedule.

Ghana received a staff-level agreement (SLA) in December 2022 for the $3 billion request, but progress on the last leg has been sluggish due to negotiations with bilateral creditors over the parameters of an external debt restructuring exercise.

Ghana currently aspires to receive an IMF Board-Level clearance in May 2023.

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