The International Monetary Fund on Wednesday agreed to disburse $91.55 million of Ghana's three-year IMF loan and approved changes to loan conditions, enabling the West African oil producer to tap higher-cost financing for needed infrastructure improvements.
The changes are a nod to a $3 billion loan approved in August from China to help Ghana, Africa's newest oil exporter, update its infrastructure. The government is in talks with China on another $6 billion loan for infrastructure development, including in the oil and gas sector.
IMF Deputy Managing Director Naoyuki Shinohara said an evaluation of Ghana's debt suggested the country could afford costlier borrowing because the projects being financed would generate sufficient revenues.
The IMF and World Bank have usually prevented poorer countries from borrowing at so called non-concessional rates to ensure their debt levels do not become a burden.
"The government's plans for scaling up critical infrastructure investments translate into significant financing needs," Shinohara said in a statement.
"While the debt sustainability analysis suggests scope for higher nonconcessional borrowing, and some of the planned projects promise significant returns, a further strengthening of debt management and project appraisal capacities is critical to keep the debt burden manageable," he added, according Reuters.
Ghana, which is also the world's second-largest cocoa producer, joined the club of Africa's oil exporters a year ago and is in need of new roads and power supplies. Its growth rate is expected to hit close to 14 percent this year on the back of oil revenues from its offshore Jubilee field, which came on line a year ago.