Renegotiating IMF Deal Unlikely, Says Economist Ahead of Ghana’s 2024 Elections

As Ghana approaches its 2024 general elections, the debate over economic policy intensifies.

Renegotiating the country’s $3 billion IMF bailout program may prove exceedingly difficult.

Ghana is currently under a three-year Extended Credit Facility (ECF) program with the IMF and has already received $1.6 billion. The program’s stringent conditions are pivotal to Ghana’s economic stability.

John Dramani Mahama, the flagbearer of the National Democratic Congress (NDC), has hinted at the potential renegotiation of the IMF deal if elected president. This stance could significantly influence the election outcome, as it directly relates to the country’s economic future. However, economist Professor Patrick Asuming believes such efforts are likely to yield minimal changes.

“As far as I understand, I’m not sure there is room for tweaking or renegotiating per se, but the IMF always engages with the authorities,” Professor Asuming remarked, highlighting that discussions typically focus on adjustment elements such as fiscal policy, public debt management, and structural reforms. At the same time, the core of the program remains intact.

Reflecting on Ghana’s recent restructuring deal with Eurobond holders, which aims to restructure approximately $13.1 billion in debt, Professor Asuming emphasized the urgency of managing debts prudently to achieve sustainability targets.

“This is crucial for our debt sustainability, enabling us to reduce debt levels to the targeted 55 per cent envisioned in the program,” he cautioned, his tone reflecting the seriousness of the situation.

He also underscored the potential benefits of the restructuring, which could pave the way for a more sustainable economic future. However, he warned against complacency: “If we perceive our debt as sustainable and continue borrowing, we risk facing similar challenges in the future.”

Ghana’s economic direction will be closely scrutinized as voters prepare to decide on leadership that will shape the country’s financial path in the coming years.

Source:newsghana.com.gh