IMF deal: Negotiations with International creditors hit deadlock – Ato Forson claims
The Minority in Ghana’s Parliament has raised concerns about a reported deadlock in the negotiations for the second tranche of a $3 billion credit facility from the International Monetary Fund (IMF).
Dr Cassiel Ato Forson, leader of the Minority caucus, disclosed that a disagreement has arisen between the government and the International Creditors’ Committee.
The disagreement revolves around the cut-off point for external debt in the debt restructuring process, a critical factor for securing the next tranche of $600 million from the IMF.
These claims were made by the Ajumako-Enyan-Essiam MP and former Deputy Finance Minister during his concluding remarks on the 2024 budget debate in Parliament on Wednesday, November 29, 2023.
The alleged stalemate raises questions about the progress and consensus in the negotiations between Ghana and the IMF for the financial assistance package.
“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.”
Dr Forson clarified that if Ghana agrees to the cut-off point proposed by the International Creditors’ Committee (ICC), it would result in more debt being excluded from the ongoing debt restructuring.
Consequently, this would require the immediate inclusion of that excluded debt in the budget to facilitate its servicing.
“The moment we begin the servicing of our external debt, everything in this budget will change.”
Ghana obtained a $3 billion bailout package from the International Monetary Fund (IMF) to address the challenges of a struggling economy marked by high debt, inflation, and a depreciating currency.
The initial installment of $600 million from the Bretton Woods Institutions has already been received by the country.
In October 2023, the IMF announced that it was awaiting the results of Ghana’s discussions with its bilateral creditors before disbursing the next installment of the $3 billion bailout package.