'IMF staff-level agreement not done deal for US$3bn facility' - Financial economist

A financial economist, Mr Emmanuel Amoah Darkwa, has explained that the IMF's staff-level agreement with the government of Ghana is not tantamount to a done deal for the US$3-billion extended credit facility from the Fund.

He said some other countries have signed such agreements with the IMF but were unable to clinch a final deal.

The SLA, he noted, is subject to management- and board-level approval by the IMF.

"If these agreements are approved, it means that the money will hit the accounts of the country," he explained.

The financial economist gave this explanation to the agreement signed by Finance Minister Ken Ofori-Atta and the IMF Mission Chief Stephan Roudet in Accra on Tuesday, December 13, 2022.

Speaking on Accra100.5FM's morning show Ghana Yensom, hosted by Odehyieba Kofi Essuman on Wednesday, December 14, 2022, Mr. Darkwa said "even before we finally get approval for a deal from the IMF, Ghana has to restructure its GHS137 billion debt."

"It is these debts that have suffocated the country to the level it finds itself", the Sikap Global partner added.

He noted that until Ghana finds ways to pay its debts, it may not get a deal from the IMF.

Mr. Darkwa said Ghana must demonstrate it can pay its debts to get final approval.

On the same program, Mr Daniel Ochem Aboagye, a former Member of Parliament (MP) for the Bantama Constituency in the Ashanti Region, said the agreement was good news for the country.

According to the former Chairman of the Finance Committee of Parliament, the SLA means something is coming to transform Ghana's economy.

He said the announcement of the deal will play in Ghana's favour on the currency market.

In his announcement of the debt exchange programme on Sunday, 4 December 2022, Mr Ofori-Atta said: "Under the programme, domestic bondholders will be asked to exchange their instruments for new ones," adding: "Existing domestic bonds as of 1st December 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032, and 2037".

Also, "the annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity. Coupon payments will be semi-annual".

Mr. Ofori-Atta noted, however, that Treasury Bills and individual bondholders are exempted from the haircuts.