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The International Monetary Fund and the World Bank have pledged to conduct a thorough update of Ghana\u2019s current debt situation through a new Debt Sustainability Analysis (DSA), which will be presented to its Executive Board when it considers the country\u2019s programme request.<\/p>\n
The DSA is forward-looking and considers steps being taken by the member to ensure sustainability over the medium term. In cases where a country\u2019s debt is assessed as unsustainable, the IMF is precluded from providing financing unless the member takes steps to restore debt sustainability, including by seeking a debt restructuring from its creditors.\u00a0<\/p>\n
In a Questions and Answers session, the Fund said when a member country requests financing, it assesses whether the country\u2019s policies are consistent with debt sustainability.<\/p>\n
\u201cThis assessment is based on a Debt Sustainability Assessment (DSA), conducted jointly by the IMF and World Bank, to determine whether the government is able to meet all its current and future payment obligations\u201d, it added<\/p>\n
On whether Ghana is seeking a three-year Extended Credit Facility programme of about $3 billion, the Fund said it is too early to comment on the final form the programme will take, since negotiations for the programme are starting now.<\/p>\n
\u201cGhana requested a similar arrangement in 2014 and which lasted 4 years. However, the level of access and the final program design is ultimately decided by the IMF Executive Board\u201d, it pointed out.<\/p>\n
IMF-supported programme to strengthen policy credibility<\/strong><\/p>\n Ghana\u2019s fiscal and debt vulnerabilities are worsening fast amid an increasingly difficult external environment.<\/p>\n During the COVID-19 pandemic, Ghana\u2019s public debt increased from 65% to 80% of Gross Domestic Product.<\/p>\n At the same time, the government\u2019s fiscal efforts to preserve debt sustainability were not seen as sufficient by investors, leading to credit rating downgrades, non-resident investors exit from domestic bond market and loss of access to international capital markets. These adverse developments, further exacerbated by the price and supply-chain shocks from the war in Ukraine, have led to a large exchange rate depreciation, a surge in inflation and pressure on foreign exchange reserves in the past months.<\/p>\n The Fund said an IMF-supported programme aims to provide space for Ghana to implement policies that will restore macroeconomic stability and anchor debt sustainability while protecting the most vulnerable parts of the population.<\/p>\n It added that this should help create the conditions for inclusive and sustainable growth and job creation, adding \u201cthis will help strengthen policy credibility, alleviate exchange rate pressures, and provide catalytic effect on financing\u201d.<\/p>\n DISCLAIMER: <\/strong>The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The International Monetary Fund and the World Bank have pledged to conduct a thorough update of Ghana\u2019s current debt situation through a new Debt Sustainability Analysis (DSA), which will be presented to its Executive Board when it considers the country\u2019s programme request. The DSA is forward-looking and considers steps being taken by the member to […]<\/p>\n","protected":false},"author":1,"featured_media":1223557,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[557,7755,1580,250,3074,7482,2548,2016,784],"class_list":["post-1232857","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-bank","tag-conduct","tag-debt","tag-ghanas","tag-imf","tag-pledge","tag-situation","tag-update","tag-world"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1232857","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1232857"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1232857\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1232857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1232857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1232857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}