Ghana won’t access IMF funding if its debts are found to be unsustainable – Analyst

Theo Acheampong  Economist Dr. Theo Acheampong is a policy analyst

Thu, 6 Oct 2022 Source: www.ghanaweb.com

A policy risk analyst, Dr. Theo Acheampong, has stated that if Ghana’s debts are found to be unsustainable, the International Monetary Fund will not release funds to the country.

According to him, the IMF has expressly spelled out that any country whose debt is unsustainable cannot access funds from the institution.

He said, according to myjoyonline reports, that: “The IMF would only lend if they’re sure that a country’s debt is sustainable. And they have a statement on their website which I’d like to quote here again and it says that ‘for those countries that have unsustainable debt the IMF is precluded from lending unless the member takes steps to restore debt sustainability which includes debt restructuring.”

He noted that per some risk analysis that was conducted on Ghana’s debt in July last year, the country is at a high debt risk.

“And to determine whether your debt is sustainable or not, there are four bands that they will do in the DNC analysis. You’re either classified as being low-risk, moderate-risk, high-risk, or in debt distress. And as of last year, when that DNC was done in July, we were already classified as being at high risk of both external and overall debt distress,” he is quoted by myjoyonline.com.

Dr. Acheampong however said Ghana needs to commence a debt-restructuring process before advancing discussions with the IMF.

“So, given where we are now with the extra deficit and the extra spending I personally won’t be surprised if we move up into the next category already being in debt distress which then means that we will have to fundamentally commence a debt restructuring exercise before accessing the IMF financing,” he said.

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Source: www.ghanaweb.com
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