Ghana must prioritize restructuring debts owed bilateral partners – Economist

Dr. Adu Sarkodie, an economist, hopes government will target bilateral partners first when working to restructure the country’s debts.

“Left to me alone, I think the first people we should deal with are the bilateral loans because it is quite easy,” Dr. Sarkodie said on The Point of View on Citi TV.

“They understand issues. That is why it was easy for us to get the HIPC [Highly Indebted Poor Country] relief because once you talk to them, these countries are likely to forgive our debt or give us a haircut or understand our situation.”

He estimates that favourable negotiations with bilateral partners could see Ghana deal with 30 percent of its debt.

Though Dr. Sarkodie said there could be mixed results, he believes the backing of the IMF gives Ghana an advantage.

“As a whole, I think the government will be able [to restructure our debts], especially with the backing of the IMF.”

Dr. Sarkodie stressed further that Ghana needed the buy-in of bilateral partners “other than that we are doomed.”

An IMF team is in Ghana until October 7 to continue discussions with the government on policies and reforms that could be supported by a lending arrangement.

The Ministry of Finance and the Bank of Ghana have commenced a comprehensive debt sustainability analysis with the IMF for a $3 billion support programme.

—citinewsroom