The debate over economic strategy is intensifying ahead of the 2024 general elections, with economic analysts suggesting that renegotiating Ghana’s $3 billion bailout program with the International Monetary Fund (IMF) might be nearly impossible.
Ghana is currently under a three-year Extended Credit Facility (ECF) program, with $1.6 billion already disbursed. The country’s economic stability relies heavily on the strict conditions set by the IMF.
In a bold statement, National Democratic Congress (NDC) flagbearer John Dramani Mahama has hinted at the possibility of renegotiating the deal if he wins the upcoming election.
However, economist Professor Patrick Asuming argues that any efforts by a new government to renegotiate with the IMF are unlikely to bring significant changes to the program’s existing structure.
“To my knowledge, there isn’t much room for significant adjustments or renegotiations, but the IMF consistently engages with the authorities.
These discussions typically focus on adjustment elements, while the core of the program remains intact,” he explained.
Regarding the Official Creditor Committee (OCC)’s formal approval of the government’s agreement with Eurobond holders to restructure approximately $13.1 billion in debt, Prof. Asuming advised the government to act prudently to achieve sustainable debt levels.
“This is vital for our debt sustainability, allowing us to reduce debt levels to the targeted 55 percent as outlined in the program,” he stated.
“Moreover, it provides potential immediate and long-term benefits to the economy, depending on how effectively we utilize the flexibility offered by this restructuring,” he added.
He also warned, “if we consider our debt sustainable and continue borrowing, we risk facing similar challenges in the near future.”
