Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has stated that the recent MoU agreement between Ghana and its Official Creditor Committee (OCC) will significantly aid in securing the approval of the country’s $360 million third tranche of funding from the IMF.
In a social media post on Wednesday, Georgieva congratulated Ghana on reaching the agreement, noting, “This will support the IMF Executive Board’s consideration of the programme’s second review later this month.”
Ghana’s MoU on debt agreement with Official Creditors follows the country’s goal to restructure approximately $13 billion in external debt. The MoU hence, represents a significant step towards restoring Ghana’s long-term debt sustainability.
Dr. Mohammed Amin Adam, Ghana’s Minister of Finance, has emphasized that this agreement would strengthen ongoing negotiations with private creditors to secure a comparable debt agreement soon.
“This landmark agreement marks an extraordinary milestone in Ghana’s debt restructuring journey and will further strengthen our ambitious reform agenda with the strong support of our development partners,” he stated.
In an interview with the Ghana News Agency, Professor Godfred Alufar Bokpin, an economist, described the agreement as a “major breakthrough” in the nation’s debt restructuring efforts.
“From all indications, the MoU would be finalized latest by the end of this month, and the IMF Executive Board would approve the second review, which would occasion the release of the third tranche of $360 million. It’s good news, but that’s not what will solve all the problems we have,” he stated.
Professor Bokpin urged for intensified reforms to tackle structural issues such as inflation and exchange rate pressures to consolidate and sustain the gains achieved.
Reflecting on previous IMF loan support programmes, he cautioned against complacency in preparing for the third review of the programme, urging media, academia, and Civil Society Organizations (CSOs) to remain vigilant.
“The third review, which will happen towards the latter part of this year and coincide with the peak election season, is where the risk lies; that’s where we need to focus our attention,” he warned.
Professor Bokpin highlighted that historically, governments have tended not to prioritize IMF reviews occurring during presidential election cycles. He called on the government to adhere to structural benchmarks for the third review, including fiscal responsibilities, and to implement tighter policies to curb excessive expenditure.
Source: Norvanreports