Minority Leader alleges deadlock in Ghana’s negotiations for second tranche of $3 billion loan

The Minority Leader, Dr Cassiel Ato Baah Forson, on Wednesday, alleged that there was a deadlock in Ghana’s negotiations for the second tranche of the $3 billion credit facility from the International Monetary Fund (IMF).

He said there was an alleged disagreement between the government and the International Creditors’ Committee regarding the cut-off point for the external debt required in the debt restructuring exercise to secure the next tranche of $600 million from the IMF.

Dr Forson made the statement in his concluding comments on the Budget Statement and Economic Policy of the Government for the 2024 fiscal year.

The Motion on the debate on the Budget Statement was moved by Mr Ken Ofori-Atta, the Minister for Finance on Tuesday, November 21, 2023, and was seconded by Mr Kojo Oppong Nkrumah, the Minister for Information.

The 2024 Budget Statement and Economic Policy of the Government was Presented to Parliament on Wednesday, November 15 2023 by Mr Ofori-Atta.

The Budget Statement outlines the government’s financial plan for the upcoming fiscal year. It details revenue projections, proposed expenditures and economic policy direction.

After its presentation, the budget undergoes thorough scrutiny and debate in Parliament. Members of Parliament (MPs) analyse and discuss the proposed allocations, ensuring accountability and transparency in financial matters.

“…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. There is a major disagreement on the cut-off point, regarding the external debt that must be excluded from the restructuring,” Dr Forson said.

“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 USD 600 million second tranche or refuse to accept,” he said.

According to Dr Forson, also the National Democratic Congress (NDC) MP for Ajumako-Enyan-Essiam, if Ghana accepted the ICC cut-off point, it would mean that there would be more debt excluded from the debt restructuring, thus necessitating the immediate inclusion in the budget to service that debt.

“Mr Speaker, the moment we begin the servicing of our external debt, everything in this budget will change,” he said.

Ghana had earlier secured a $3 billion bailout package from the IMF to help recover the economy alleged to be riddled with debt, high inflation and depreciating cedi.

The country had already received the first tranche of $600 million from the Bretton Woods Institutions.

Meanwhile, the IMF in October 2023 said it was waiting for the outcome of Ghana’s engagement with its bilateral creditors before releasing the next tranche of the $3 billion bailout package.