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General News of Wednesday, 28 September 2022

Source: starrfm.com.gh

Government will hit a snag with debt calculation in IMF negotiation - Terkper

Seth Terkper, former Finance Minister Seth Terkper, former Finance Minister

Former Minister for Finance, Seth Terkper says the government will have challenges with the calculation of the numerous debts incurred over the period in the debt sustainability analysis with the International Monetary Fund(IMF).

Speaking on Morning Starr with Francis Abban Tuesday, September 27, 2022, Mr. Terkper indicated that there are a number of debts the government must table for analysis as part of the negotiation process.

“Any other debt which was guaranteed by Parliament will have to be added if there is the probability that they cannot be met. So this is where the scanning will have to be placed. All of these will have to be shared on the framework of debt sustainability.

“That is what the statement that was issued yesterday was talking about the success of the negotiations which is dependent on a stable situation going forward. The debt sustainability framework actually puts in all these debt situations, for example your ability to generate foreign exchange to service the foreign debts. Your ability to raise revenue,” Mr. Terkper stated.

He continued: “Now your trade and other things come in, your growth probability and others are fed in and extended over a long period of ten years plus. So that is how long that analysis goes and it means there is a major problem as we have always discussed the calculation of arrears and the calculation of debts.”

He added that there are issues of arrears arising from nonpayment of domestic and foreign on the purchase of crude during the COVID-19 period and arrears owed contractors among others.

The Ministry of Finance on Monday announced that the IMF delegation is currently undertaking a comprehensive debt sustainability analysis of the country.

“The Government of Ghana is putting together a comprehensive post-Covid-19 economic programme which will form the basis for the IMF negotiations.

“The programme seeks to establish a macro-fiscal path that ensures debt sustainability and macroeconomic stability, underpinned by key structural reforms and social protection.”

Background

An International Monetary Fund (IMF) staff team, led by Stéphane Roudet, Mission Chief for Ghana, is in Accra to continue discussions with the Ghanaian authorities on policies and reforms that could be supported by an IMF lending arrangement.

The IMF staff will also further engage with other stakeholders during the visit.

There was an IMF staff team visit in July that saw the initial discussions with the Ghanaian authorities.

“We characterized that mission as constructive, kickstarted the process, and laid the groundwork for engagement,” Gerry Rice, the Director of Communications for the IMF told a media engagement ahead of this week’s visit.

Ghana is in dire need of a $3 billion package from the fund to shore up its economy.

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