The Minister for Finance, Ken Ofori-Atta, says the government is not racing to return to the international capital market to borrow after securing $3 billion in financing support from the International Monetary Fund (IMF).
According to the Minister, though penetrating the international capital market was important to make the country attractive to investors, the revenue measures put in place should be able to hold Ghana for the mean time.
“No, there is no rush to go to the international capital market,” Ken Ofori-Atta said at the joint press conference the ministry and the IMF held in Washington yesterday, to respond to questions about the $3 billion Extended Credit Facility (ECF).
The minister was responding to a question on why the government would want to “rush” to the international capital market just after securing the deal from the IMF.
According to him, it was the expectation of the government that, in managing its expenditures and increasing its revenue, there would be resources to work with.
He explained, while commenting on borrowing more, that the reason for the IMF-backed program was to bring the debt-to-GDP ratio down to 55% of GDP.
Referring to the revenue measures contained in the 2023 budget, the Minister observed that they were improving at the Ghana Revenue Authority, adding that it would give them resources to move forward, maintaining that curtailing and managing expenditures are going to be important.
“Working towards the capital market is important because we then get our ratings up and make the country more attractive for investors, especially FDI, but rest assured no one is rushing to the international capital market at this juncture,” he said.
The IMF Mission Chief for Ghana, Stéphane Roudet, said Ghana presented a sound program, making a good case for the Fund to support it.
According to him, he had “no reason to believe that the program will not be fully completed.”
He added that the IMF was confident in supporting Ghana based on the strength of its program.
However, the IMF, according to Stéphane, has mechanisms in place to monitor the progress of the program.
He stated that there were no other conditions attached to the first tranche of the $3 billion loan, which is $600 million.
He added that the first review of the 3-year program in November of this year would be based on the quantitative performance criteria set by the government.
Meanwhile, the IMF has described Ghana’s Post-COVID-19 Programme for Economic Growth (PC-PEG) as “very ambitious.”
The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, maintained that regardless of the effects of the Domestic Debt Exchange Program (DDEP), banks in Ghana are liquid.
He added that the Central Bank was also ready to provide liquidity support to any of the banks that became insolvent.
The government expects that the first tranche of the $3 billion loan from the IMF to reflect in the BoG account today, May 19, 2023.
During the joint press conference yesterday, the Finance Minister, in answer to a question, made a passing comment to the IMF Mission Chief for Ghana that he was hoping to work with him to ensure the $600 million landed in Ghana today.This amount, the minister said, would be deployed to support the government’s program for economic growth.