IMF announcing SLA before external creditor agreement strategic – Lord Mensah

Senior Lecturer at University of Ghana Business School (UGBS), Prof. Lord Mensah has described the IMF’s announcement of a staff-level agreement with Ghana before demanding external creditors’ agreement as strategic and a move aimed at given Ghana a leverage in its negotiation.

“Strategically, I believe the IMF did not force the government to have external creditor agreement before they came in for this review. They came in for this review and then they have this staff level approval for which will send a good signal to the external investor out there and a result of that if we should go into negotiations with them we have a certain level of leverage”, he told Francis Abban on GHOne TV’s State of Affairs.

“At least we have an external stakeholder which is the IMF who has come to assess the economy and has given some hope to citizens and also the external creditors”, he added.

Prof. Lord Mensah also says he expects government to face close to no hurdle in closing a deal with its external creditors.

“Government would not struggle that much in dealing with the external creditors because they understand the investment space. At the point Europe was giving these investors about 1% and 1.5% in coupon rate, we were given them 7%. So those investors knew the premium they were enjoying and understood the risk that goes with it”, he said optimistically.

Also with the IMF on us, they will come to the table with certain soft position, because they know that once the IMF is with you, you are going to stay financially discipline and that will improve your debt service capacity”, he concluded.