The Minority in Parliament has expressed deep concerns about an impasse hindering the negotiation for Ghana’s second tranche of a $3 billion credit facility from the International Monetary Fund (IMF).
Leader of the Minority caucus, Dr. Cassiel Ato Forson, disclosed the negotiation between the government and the International Creditors’ Committee is casting a foreboding shadow over the ongoing talks.
At the core of the disagreement lies the cut-off point for external debt in the intricate debt restructuring process—a pivotal factor in unlocking the next tranche of $600 million from the IMF.
Dr. Forson, delivering his conclusive remarks during the 2024 budget debate in Parliament on Wednesday, November 29, 2023, sounded the alarm, stating, “Ghana is between a rock and a hard place” in the face of this deadlock.
Elaborating on the issue, he emphasized, “There is a major disagreement on the cut-off point, regarding the external debt that must be excluded from the restructuring.”
The deadlock raises critical questions about the trajectory of negotiations and the consensus between Ghana and the IMF in securing the crucial financial assistance package.
Dr. Forson issued a stark warning, “If Ghana accepts the cut-off point proposed by the International Creditors’ Committee, it will result in more debt being excluded from the ongoing debt restructuring.”
Such a scenario would necessitate the immediate inclusion of the excluded debt in the budget, significantly altering Ghana’s fiscal landscape.
Ghana’s economic challenges led to the acquisition of a $3 billion bailout package from the IMF to address issues such as high debt, inflation, and a depreciating currency.
The first instalment of $600 million has been received, but the IMF awaits the outcome of Ghana’s discussions with bilateral creditors before disbursing the next tranche.
As the deadlock persists, Ghana finds itself at a pivotal juncture, navigating the intricate terrain of debt restructuring and international negotiations. The potential repercussions loom large, resonating throughout the nation’s economic landscape.