Fast track processes to get IMF Board’s approval on bailout deal – Economist urges

Economist and currency analyst at GC Capital Limited, Courage Boti wants the government to expedite steps aimed at getting International Monetary Fund’s Board approval on the bailout programme.

Having reached a Staff Level Agreement with the Fund for a US$ 3 billion bailout, government is eyeing an IMF Board approval in the first quarter of 2023.

“The cost of this not succeeding will be too huge for our economy”, Finance Minister, Ken Ofori-Atta has said.

Speaking on Citi TV after the Minister addressed the nation on government’s suspension of all payments of external debts to help the economy bounce back, Courage Boti advised government and Parliament to act swiftly in securing the approval of the IMF Board.

“The most useful message is urging Parliament to approve the process of budget approval which is important to securing staff-level agreement with the IMF. Probably, broad policies have been approved, but specific policies like the debt restructuring, budget for many offices and related policies need to be looked at and approved. That could go a long way to help the government achieve the domestic debt restructuring which is now a pre-condition to obtain a board approval. I think that is a key message of note”, he told Citi News‘ Nana Tuffour Boateng.

The Finance Ministry on Monday, December 19, stated that the suspension will include the payments on Ghana’s Eurobonds; commercial term loans; and most of the country’s bilateral debt.

The suspension, according to the Ministry will, however, not affect the payments of Ghana’s multilateral debt, new debts (whether multilateral or otherwise) contracted after 19th December 2022 or debts related to certain short-term trade facilities.

“The bigger risk is whether we get the approval of the Board and in good time. If we get it in Q1 as the Finance Minister makes us believe, then that becomes a catalyst that could shore up the reserves and deal with our challenges”, Courage Boti added.

The Government launched the Domestic Debt Exchange Programme on December 5, 2022, which affects the Government’s bonds listed on the Ghana Fixed Income Market (GFIM).

The Ministry of Finance (MoF), on Saturday, announced the extension of the Debt Exchange Programme to December 30, 2022. The debt exchange was to deal with the country’s economic crisis.

The Debt Exchange Programme which was expected to expire on Monday, December 19, 2022, has been extended with a contemplated settlement date of Friday, January 6, 2023.