EIU warns of potential delay in IMF board approval for Ghana
The Economist Intelligence Unit (EIU) has cautioned that the approval of the International Monetary Fund (IMF) board for Ghana may be delayed due to ongoing negotiations regarding external debt-restructuring, which involves multiple stakeholders in the process.
The UK-based firm stated in its 2023 Country Report on Ghana that it expects Ghana to finalize restructuring agreements on its public external debt in 2023-2024, with both official and private creditors.
This would involve a combination of interest rate reductions, maturity extensions, and write-offs.
Although the EIU anticipates official creditors to agree to a deal in 2023 and that domestic debt restructuring has already been secured, there is still a risk of IMF board approval delay.
There have already been mixed expectations of the IMF support program by May 2023. Ghana had first requested an IMF extended credit facility (ECF) program in July 2022, due to unsustainable debt levels, soaring debt-service costs, a weakened currency, and large twin fiscal and current account deficits. In early December 2022, the government announced a local-currency debt swap, and plans to launch an external debt-restructuring program.
The government was able to reach a staff-level agreement with the IMF for a $3 billion ECF arrangement on December 12, 2022, paving the way for the country to suspend payments on most of its external debt and begin the restructuring process.
Source: Ghana Business
