IMF team in Ghana concludes crucial stage in bailout negotiations

An IMF team that has been in Ghana since last week for a possible rescue programme for the country’s economy have concluded scrutiny of data presented by government.

The team met with the Ghanaian team Thursday, where the country’s negotiators made a strong case for economic support from the Washington lender.

The IMF team also sought clarity on proposals by Ghana government on how the embattled economy should be rescued.

The Ghana team, led by former Minister of Finance Professor Kwesi Botchwey, is composed of current Finance Minister , Seth Terkper, Employment Minister, Haruna Iddrissu, and Governor of the Bank of Ghana Kofi Wampah.

Analysts say Ghana would not have to request too much financial support from the IMF because of the recent 3 billion dollars the country raised from its bond issue, as well as money it holds from the cocoa loan syndication.

However, going by the IMF’s last staff report, tough conditionalities are a very likely to support the country’s balance of payment.

President John  Mahama has already indicated that Ghana would seek a three-year programme from the IMF, an indication that should Ghana get approval for proposals it has put forth to the Bretton Woods lender, it can start accessing the IMF’s support from January 2015.

Group Head of Economic Research at Ecobank, Angus Downie, says government might be going into the IMF negotiations with its hand tied.

He said the country’s rising debts and budget deficit present an advantage for the country.

“The conditionalities attached to any IMF programme can be tough. The reason they are tough is because there are difficult challenges to overcome”, he told Joy Business in London.

However, he notes with the country’s large fiscal deficit, large current account deficit, a slowing economy among others, a tough IMF programme is almost certain.

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