A Professor at the University of\u00a0Ghana\u00a0Business\u00a0School,\u00a0Lord Mensah\u00a0has cautioned\u00a0Finance Minister\u00a0Ken\u00a0Ofori-Atta\u00a0to be measured in his optimism of receiving the $600 million second tranche of the\u00a0International Monetary Fund\u00a0(IMF) cash as early as possible.<\/strong><\/p>\nHe says the factors involved in the release of the cash are way beyond the control of Ghana. From all indications, he said, Ghana was not going to receive the $600million second tranche as quickly as expected.<\/p>\n
He observed that the Finance\u00a0Minister\u00a0has positioned himself in a way that suggests that the cash is going to be released anytime soon.<\/p>\n
Prof Mensah explained that the diversity of the backgrounds of Ghana\u2019s\u00a0external creditors including\u00a0China, was going to make it difficult for them to reach a common ground on the release of the funds.<\/p>\n
Multiple media reports have indicated that the IMF has rescheduled its board meeting to consider Ghana\u2019s second review under the Fund programme and the disbursement of the second tranche of $600 million to January 11, 2024.<\/strong><\/p>\nCommenting on this on the Business Focus on TV3 Monday December 18, Prof Lord Mensah said \u201cWe have to understand the debt component of these external creditors, and the diversity of their backgrounds. Some of them are people\u2019s\u00a0pensions\u00a0that they have invested in our economy. We need to also appreciate the geographical diversity as well, we are talking about the eastern part of the globe, China and the Western side. So effectively you are not going to get common grounds as easily as it is expected even though we are lucky to have that creditor coordinatorship that is coming as a result of the creditor committee that has been formed.<\/p>\n
\u201cWe should understand that the way China will treat its debt is completely different from that of Europe. Most of China\u2019s debts are highly concentrated public funds and do not purely commercialised as expected so obviously a decision on it is not a straightforward thing. The corruption issue in China and how they treat investment, so effectively those differentials will bring about the delay.<\/p>\n
\u201cAlso when we talk about the creditor agreement it is a counterparty kind of act and being a counterparty act, it is expected that, in Ghana, we have done our homework but the other side which are the creditors, they will also sit down and do their homework. so obvious we are not going to get to convergent points as quickly as we anticipate. The Finance Minister seems to position himself in such a way that at any point in time\u00a0 he is soo optimistic as if he has more information on the other side of the coin which are the crediros but then it is not like that.\u00a0 This is not Ghana where he bulldozes his way through and then within 2 or three nights he announces a debt restructuring whether you like it or not, you must take it. This is completely different\u00a0 from what we have in our environment<\/p>\n
Mr Ofori-Atta had indicated that Ghana met all six of the Quantitative Performance Criteria (QPCs) during the first review.<\/p>\n
Presenting the\u00a02024 budget\u00a0statement to Parliament on Wednesday, November 15, Mr\u00a0Ofori-Atta\u00a0explained that the IMF-supported Post\u00a0COVID-19\u00a0Programme for Economic Growth (PC-PEG) is assessed semi-annually by the IMF through an IMF staff review mission followed by final approval by the IMF Executive Board.<\/p>\n
Disbursements under the Programme are tied to the successful completion of each review, he added.<\/p>\n
The reviews assess Ghana\u2019s\u00a0progress towards meeting the Quantitative Performance Criteria (QPCs), Indicative Targets (ITs), and Structural Benchmarks (SBs).<\/p>\n
Ghana\u2019s first review commenced with the IMF fielding a mission to undertake a staff assessment from 25th September to 6th October 2023.<\/p>\n
This review covered the assessment of:<\/p>\n
i. six (6) Quantitative Performance Criteria (PCs);
ii. one (1) Monetary Policy Consultation Clause (MPCC) for\u00a0inflation;
iii. three (3) Indicative Targets (ITs); and
iv. nine (7) Structural Reform Benchmarks (SBs) that were due at the end of September 2023.<\/p>\n
\u201cI am glad to inform this august house that based on the IMF\u2019s own assessment (at the staff level) after the first review, Ghana met All six (6) of the Quantitative Performance Criteria (QPCs). The QPCs are a floor on net international reserves, ceiling on primary balance on commitment basis, ceiling on contracting non-concessional loan\/guarantee, zero collateralized borrowing, and no accumulation of external debt service arrears.<\/p>\n
\u201cTwo (2) out of the 3 Indicative Targets. The two ITs met are a floor on social spending and a floor on non-oil public revenue. The IT on zero net accumulation of payables was extended largely due to the ongoing negotiations with Energy Sector IPP on legacy debt; .<\/p>\n
\u201cSix (6) out of the seven (7) Structural Benchmarks due end-September 2023. The six SBs met are (a) preparation and publication of arrears clearance and prevention strategy, (b) preparation and publication of financial sector strengthening strategy, (c) preparation and publication a strategy for review of earmarked (statutory) funds, (d) preparation and
publication of a medium-term revenue strategy, (e) a strategy for indexation of LEAP benefits and (f)\u00a0BoG\u00a0to approve capital building buffer plans for\u00a0banks. The seventh SB on the preparation and publication of an updated Energy Sector Recovery Plan which was expected to be completed at the end of June 2023 was strategically completed and
published on the MoF website in October 2023.<\/p>\n
\u201cMr.\u00a0Speaker, the outstanding performance of Ghana during the first (1st) review paved the way for Ghana to reach a Staff Level\u00a0Agreement\u00a0(SLA) with IMF on the 6th October 2023, a record five (5) months after the Programme was approved in May 2023.\u201d<\/p>\n
Governor of the\u00a0Bank\u00a0of\u00a0Ghana\u00a0(BoG),\u00a0Dr Ernest Addison, also anticipated the board of Fund to meet before the end of the year to consider the release of the second tranche of the $ 3 billion cash.<\/p>\n
This followed the successful review of the $600 million first tranche.<\/p>\n
Dr Addison said this while answering questions at the 115th Monetary Policy Committee (MPC) press conference in Accra on Monday, November 27.<\/p>\n
He said \u201cWe expect the IMF board meeting to take place before the end of the year, which should also trigger another disbursement of foreign exchange.\u201d<\/p>\n
3news.com<\/p>\n
<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
A Professor at the University of\u00a0Ghana\u00a0Business\u00a0School,\u00a0Lord Mensah\u00a0has cautioned\u00a0Finance Minister\u00a0Ken\u00a0Ofori-Atta\u00a0to be measured in his optimism of receiving the $600 million second tranche of the\u00a0International Monetary Fund\u00a0(IMF) cash as early as possible. He says the factors involved in the release of the cash are way beyond the control of Ghana. From all indications, he said, Ghana was […]<\/p>\n","protected":false},"author":1,"featured_media":133002,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-133000","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n
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