Ghana's plan to borrow $500 million in its first loan from investment banker Goldman Sachs Group Inc. to upgrade rail lines is hold until it gets approval from the International Monetary Fund.

“Because of the impact it will have on the country’s debt position, we needed to seek a waiver from the IMF before going ahead,” said Newman Kusi, a finance ministry adviser, in an interview in Accra, the capital, yesterday. The board of the Washington-based lender will meet in the next two months, he said.

Ghana, which borrowed $1 billion from the IMF in July 2009 to stabilize its economy after the currency slumped and the budget deficit climbed, needs approval from the Washington lender to undertake any new non-concessionary loans, including the Goldman plan, Kusi said. No one answered the phone yesterday or today at the Accra office of Wayne Mitchell, the fund’s resident representative for Ghana.

The country wants to use the money as part of a total $4 billion needed to upgrade railways that will link the port city of Tema and Accra, 30 kilometers (18.6 miles) away, to the southern towns of Koforidua and Nsawam and the second-biggest city, Kumasi.

More Borrowing

The government is planning to borrow a total of $1.4 billion from Goldman for the rails project, Kusi said. Africa Rail Ghana Ltd. of Norway has signed a deal with the Ministry of Transportation in Ghana to undertake the project, including arranging the rest of the financing.

Ghana’s currency, the cedi, weakened nearly 12 percent against the U.S. dollar in the first six months of 2009, while the budget deficit reached 14 percent of gross domestic product, according to the African Development Bank. The cedi traded at 1.5132 to the dollar at 12:32 p.m. in Accra, according to data compiled by Bloomberg.

The deficit was about 9.7 percent this year, higher than a government target of 7.5 percent, Finance Minister Kwabena Duffuor said Nov. 18. The shortfall will narrow to 7.5 percent of GDP next year and 4.7 percent in 2012, he said.