"Ghana, IMF ends 2-week long negotiations tomorrow"

" Ghana, IMF ends 2-week long negotiations tomorrow \r\n\r\nGhana ends its two-week-long negotiations with the International Monetary Fund (IMF) for a Staff Level Agreement tomorrow, Tuesday, December 13, 2022.\r\n\r\nIt is expected that, the government delegation led by the country\u2019s Finance Chief, Ken Ofori-Atta will be able to secure a deal from the IMF.\r\n\r\nA deal from the IMF is expected especially given the fact that the government has accepted and started the rollout of the Domestic Debt Exchange Programme (DDEP) which is expected to help restore the country\u2019s public debt to a sustainable level.\r\n\r\nIn total, a whooping GHS 137bn in domestic bonds is expected to be exchanged for the \u2018new bonds\u2019 by government.\r\n\r\nGHS denominated Notes and Bonds issued by the Republic of Ghana accounts for the largest portion of the domestic debt being GHS 126bn in total value.\r\n\r\nGHS denominated bonds issued by E.S.L.A. Plc and Daakye Trust Plc account for GHS 8.3bn and GHS 2.7bn respectively of the total domestic bond value.\r\n\r\nAccording to the Finance Ministry, payments of principal value of the \u2018new bonds\u2019 will be made per government\u2019s \u201cExchange Consideration Ratios\u201d where 17% of principal value of bonds will be paid at end-2027; another 17% paid at end-2029; 25% paid at end-2032 and the final 41% paid at end-2037.\r\n\r\nAnnual coupons on the \u2018new bonds\u2019 government asserts, will be set at 0% in 2023; 5% in 2024 and 10% from 2025 until maturity.\r\n\r\n DDEP necessary for $3bn IMF deal\u00a0 \r\n\r\nFinance Chief Ken Ofori Atta, has revealed that the Domestic Debt Exchange Programme (DDEP) by government is a necessary requirement for a deal with the IMF.\r\n\r\nAccording to him, the government has no choice but to undertake the debt restructuring programme to put the country\u2019s debt level on a sustainable path.\r\n\r\nIn a press briefing on Monday, December 5, Finance Chief Ofori-Atta noted that no individual bondholder will lose their funds in the proposed programme, further assuring financial sector players of government\u2019s support to minimise the impact of the programme on their activities.\r\n\r\nCurrently, Ghana is seeking an economic programme from the IMF to address its balance of payment and other financing challenges.\r\n \r\n \r\n \r\n As part of the deal, the government has embarked on a debt sustainability analysis which indicates that the country\u2019s debt level which exceeded 100% of Gross Domestic Product is unsustainable, hence the need for such an action. \r\n \r\n \r\n \r\n\r\nAn International Monetary Fund (IMF) staff team, led by St\u00e9phane Roudet, mission chief for Ghana, is currently in Accra.\r\n\r\nThe IMF team who landed in Accra on December 1 and are expected to leave the country on December 13, are in Ghana to continue discussions with the authorities on the country\u2019s post-COVID program for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement.\r\n\r\nPrior to the visit, Mr Roudet in a statement said,\u00a0 \u201cWe have had productive discussions with the Ghanaian authorities over the last few months and look forward to our engagement in Accra. \r\n\r\n \u201cOur objective for this visit is to make further progress toward reaching agreement on policies and reforms that could be supported by an IMF lending arrangement. \r\n\r\n \u201cThe IMF remains fully committed to help Ghana restore macroeconomic stability, bring relief to Ghanaians in this time of crisis, and lay the foundation for more inclusive growth.\u201d \r\n\r\n \r\n \r\n "

"Ghana, IMF ends 2-week long negotiations tomorrow"

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