Minority alleges stalemate in Ghana’s IMF negotiations for $600 million second tranche

Economy & Investments Minority alleges stalemate in Ghanas IMF negotiations for 600 million second tranche
NOV 29, 2023 LISTEN

The Minority in Parliament has alleged that there is a stalemate in Ghana’s negotiations for the second tranche of the $3 billion credit facility from the International Monetary Fund (IMF).

According to the Minority, the statement stems from a disagreement between the government and the International Creditors’ Committee (ICC) regarding the cut-off point for the external debt to be included in the debt restructuring exercise. This disagreement has put the release of the next tranche of $600 million in jeopardy.

Minority Leader, Dr. Cassiel Ato Forson who made the allegation during his concluding remarks on the 2024 budget debate in Parliament on Wednesday, November 29, 2023, said Ghana is currently in a tight spot.

“Mr. Speaker, it will interest you to know that there is a deadlock in the negotiation between Ghana and the International Creditors Committee (ICC) made up of China and the Paris Club 50. There is a major disagreement on the cut-off point, regarding the external debt that must be excluded from the restructuring. Mr. Speaker, I do not need to sound the alarm that at this point, Ghana is between a rock and a hard place.”

“Ghana will need to decide either to accept the cut-off date as proposed by the International Creditors Committee and get the IMF Board to approve our USD600 million second tranche or refuse to accept.”

He explained that the government’s acceptance of the ICC’s cut-off point would result in a larger portion of external debt being excluded from the restructuring. Consequently, Ghana would be required to immediately include this debt in its budget for servicing purposes.

“The moment we begin the servicing of our external debt, everything in this budget will change.”

Ghana had previously secured a $3 billion bailout package from the IMF to address its economic challenges, including debt accumulation, high inflation, and a depreciating cedi. The country has already received the first tranche of $600 million from the Bretton Woods institution.

The IMF has indicated that it is awaiting the outcome of Ghana’s engagement with its bilateral creditors before releasing the next tranche of the bailout package.

The ongoing stalemate with the ICC could further delay the disbursement of these critical funds.

- Citi Newsroom