Abebe Aemro Selassie, the director of the International Monetary Fund’s (IMF) African Department, has urged Ghana to provide evidence of the sustainability of its debt before the IMF will accept the country’s economic support package.
On October 14, Mr. Selassie added, “the government also needs a realistic economic reform plan before an agreement for a fund-assisted program could be achieved,” in a talk with the media in Washington, US.
The IMF is eager to help Ghana overcome its current economic problems, but he made it plain that “so much will rely on how soon this reform plan can be fleshed out for execution.”
In order for us to advance, he said, “There are also significant steps that must be done in terms of how the program will be financed.”The press conference was held in conjunction with the IMF/WB annual sessions, which ended on October 16, 2022.
In the conference, it was revealed that the debt stock reached its peak in September at GH402.4 billion, or 68% of GDP, and that the cost of debt servicing is predicted to account for more than 80% of all receipts and grants.
When discussing the prerequisites for debt sustainability, Mr. Selassie noted that the primary goal should be on how to strengthen the economy, which in turn must assist to better the lives of the populace.
He said that when a country receives aid for so long yet still sees suffering among its population, the fund’s goals have not been achieved.
He Said, “To be clear, an important element of our engagement with Ghana, as is with any country, is making sure that when we provide finances and resources, the finances go to help the country and the people and if the debt is unsustainable, the extent to which that can happen is limited.”
“So, part of the ongoing work is to assess where the debt sustainability situation is right now and how the government would like to address that. We are waiting for the results of that assessment”.
The IMF and Ghana are currently in discussions, but Finance Minister Ken Ofori-Atta has reassured Ghanaians that the talks would be fruitful. He expects that by December of this year, the IMF will be able to give Ghana some money so that Ghana may use it to reorganize its economy.
