Ghana’s ability to obtain an economic programme from the International Monetary Fund (IMF) now depends on evidence of the nation’s capacity to meet all of its present and future financial obligations without the need for extraordinary financial assistance or defaulting.
Director of the IMF’s African Department, Abebe Aemro Selassie, made this known during the 2022 IMF/World Bank annual meetings in Washington, D.C., that ended on October 16, 2022.
During a press conference, Mr Aemro Selassie said, “so much will depend on how quickly this reform plan can be fleshed out for implementation. There are also important initiatives that have to be taken in terms of how the programme will be financed so that we can move forward.”
Ghana’s debt stock peaked at GH¢402.4 billion in September, equivalent to 68 per cent of its GDP.
Ghana is a member of the IMF, and when a member country requests financing from the Fund, it assesses whether the country’s policies are consistent with debt sustainability.
This assessment is based on a Debt Sustainability Assessment (DSA), conducted jointly by the IMF and World Bank, to determine whether the government is able to meet all its current and future payment obligations.
In cases where a country’s debt is assessed as unsustainable, the IMF is precluded from providing financing unless the member takes steps to restore debt sustainability, including by seeking a debt restructuring from its creditors.
Per reports, Ghana has furnished the Fund with proof that it has a debt sustainability plan.
After the government of Ghana provided a debt situation plan, it was presented to the IMF’s Executive Board for consideration by the authorities’ programme request.
According to Mr Abebe Aemro Selassie, the IMF is awaiting the results of the debt sustainability analysis (DSA) exercise.
“So, part of the work ongoing now is to assess where the debt sustainability situation is right now and how the government would like to address that. We are waiting for the results of that assessment,” Mr Selassie said.
Ghana formally commenced negotiations with the Fund in September 2022, after reaching out in July this year.
An economic programme from the Fund is expected to help Ghana address the depreciation of the local currency, its high inflation, and undertake several developmental projects to resolve the current economic crisis.
There have been assurances from the IMF that a deal could be reached with Ghana by December, should all conditions be met.
Source: The Independent Ghana