The enterprise risks associated with Ghana’s Economic Credit Facility-supported arrangement are high but mitigated by strong programme design, the authorities’ high commitment, and political and financing assurances.

According to the International Monetary Fund, Ghana’s capacity to repay the Fund is adequate but subject to significant downside risks.

The assessment assumes successful programme and debt restructuring implementation predicated on achieving moderate risk of debt distress and restoring adequate market access.

According to the Washington-based multilateral lender, the stock of debt to the Fund as a share of Gross Domestic Product (based on the existing and prospective drawing) remains at elevated levels, peaking in 2025 at 5.1% of GDP.

Meanwhile, debt service obligations to the Fund will reach a peak of 10.8% of total debt service in 2030.

While improving, Special Deposit Rights (SDR) holdings remain at relatively low levels (SDR 46.5 million at end-July 2024 compared to SDR 634.3 million at end-July 2022).

IMF assures ongoing debt restructuring to generate financing consistent with ECF

The IMF however assured that the ongoing debt restructuring will generate financing consistent with the Economic Credit Facility (ECF) programme parameters and restore debt sustainability.

According to the Fund, the ongoing progress toward signature of the Memorandum of Understanding (MoU)between the government and the Official Creditor Committee (OCC)and preparation of bilateral agreements to implement the MoU satisfy the Fund’s Lending into Official Arrears (LIOA) policy.

It explained that the arrears to other official bilateral creditors are deemed away in application of the LIOA policy.

Following the successful Eurobonds restructuring and consistent with the Lending into Arrears policy, the IMF said the government and the Bank of Ghana re making good faith efforts to reach a debt restructuring agreement with other external commercial creditors on comparable terms and within program parameters, by maintaining a substantive dialogue with these creditors and seeking a collaborative process.