28th September 2022 1:46:08 PM
2 mins readAccording to Seth Terkper, a former minister of finance, the government will face difficulties when calculating the various debts accumulated throughout the time period for the debt sustainability analysis with the International Monetary Fund (IMF).
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On Tuesday, September 27, 2022, Mr. Terkper said on Morning Starr with Francis Abban that the administration must provide a number of debts for examination as part of the bargaining process.
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If there is a chance that they won't be paid, any additional debt that Parliament guaranteed will need to be added.
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Therefore, this is where the scanning must be done.
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These will all need to be discussed in relation to the framework for debt sustainability.
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“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.
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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.”
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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.
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The Ministry of Finance on Monday announced that the IMF delegation is currently undertaking a comprehensive debt sustainability analysis of the country.
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“The Government of Ghana is putting together a comprehensive post-Covid-19 economic programme which will form the basis for the IMF negotiations.
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“The programme seeks to establish a macro-fiscal path that ensures debt sustainability and macroeconomic stability, underpinned by key structural reforms and social protection.”
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Background
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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.
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The IMF staff will also further engage with other stakeholders during the visit.
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There was an IMF staff team visit in July that saw the initial discussions with the Ghanaian authorities.
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“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.
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Ghana is in dire need of a $3 billion package from the fund to shore up its economy.
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