Prof Lord Mensah expresses skepticism over securing $600m second tranche in January
Associate Professor of Finance with the University of Ghana Business School (UGBS), Professor Lord Mensah, has expressed skepticism over Ghana securing the $600m IMF second tranche by the second week of January 2024.
His skepticism was in response to an assertion made by Petroleum Economist and Political Risk Analyst, Dr Theo Acheampong, on the premise of the rescheduled IMF Board meeting to consider the disbursement of the $600m second tranche to January 11, 2024.
His skepticism to the disbursement in the second week of January further arises out of the hesitation of China to agree to certain terms of Ghana’s external debt restructuring, notably with regards to the 30% – 40% cut on debt holdings by China and other members of the Official Creditor Committee (OCC) given that the disbursement is dependent on agreements between Ghana and the OCC.
“China does not want a situation where they will be put at a disadvantage. With China’s posture, we are obviously going to have a delay in the disbursement of the $600m tranche.
“So I have the hesitation to say that we will receive the monies in January because although the OCC may have been formed, creditor coordination is important to come to a convergent point or agreement. So I am skeptical that we may receive the funds in the 2nd week of January,’ he stated.
Adding that the speed at which Ghana got the first disbursement won’t be the same with the second tranche.
“The speed at which we got the first tranche, we have taken it for granted and relaxed and assumed that it will be the same for the second tranche.
“But with the second tranche, we will have to get all the conditions met including the external agreements before we get the monies,” he noted speaking during the NorvanReports and Economic Governance Platform (EGP) X Space on the topic, “Ghana’s Second $600m IMF Cash; A Mirage or Reality.”
Speaking further, Prof Lord Mensah noted that, the Ghanaian economy is going to face serious challenges if it fails to secure the second tranche.
“We are going to have a serious problem if we don’t get the money. And also unfortunately, the IMF second tranche is tied to all other ancillary monetary support from the World Bank, AfDB and others. So if we don’t get the money, we will really be in a bad place,” he posited.
The International Monetary Fund (IMF) has rescheduled its board meeting to consider Ghana’s second review under the Fund programme and the disbursement of the second tranche of $600 million to January 11, 2024.
The IMF Board was expected to meet on Ghana’s programme for the second review in November 2023.
However, the challenge in reaching an agreement with China on the debt restructuring compelled the Fund to reschedule the date on two occasions; in the first week of December 2023 and December 21, 2023.
