Business News of Friday, 16 March 2018
The International Monetary Fund, (IMF) says it supports government’s move to issue Eurobond to raise as much as $2.5 billion later this year.
This was after government submitted proposals to parliament that could see the finance ministry raise the amount before June this year.
IMF Country Representative to Ghana, Dr Natalia koliadina said, “Well, the issue is not how much money it is, but what this money is going to be used for because let me take you to one step back; the financing need of the government has been declining due to fiscal consolidation. You know that last year fiscal deficit was below 6.3% so it was better than budgeted and the government was able for the first time since 2003 record the fiscal prime rate in surplus which is a major achievement.
…at the same time the government has a medium-term debt management strategy which is looking at rationalizing the structural maturities of debt and also reducing possibly the cost of debt. So I suppose that the government can take an opportunity or may wish to take an opportunity and step the market while conditions are quite positive.”
There were fears that this could be shot down by the IMF, because of its impact on the debt stock and especially when there are some critical conditions to be met before the Fund’s board meeting in April.
IMF allays fear
However, the Fund has allayed fears of government missing out on the Fund’s cash and board approval.
The IMF is confident the government would be able to implement those critical measures to pass the program review test. This should pave the way for the IMF board to approve the disbursement of over $200 million to support the country’s economy.
There are fears that the government may struggle with some prior actions which reports say may include increasing taxes and reducing borrowings.
Dr. koliadina would however not confirm these reports. She tells JoyBusiness the Fund has made a lot of progress in its discussions with the government on the program.
She said, “We have made very good progress in our discussions. We’ve reached understandings on many issues but there are a few remaining issues which we need to sort out and then we expect to go to the board in April.”