It could take as long as eight months of negotiations for Ghana to secure funding from the International Monetary Fund, investment bank, IC Securities has disclosed in its comprehensive analysis of Ghana’s fiscal economy.
This means the country will have to wait until March 2023 before receiving inflows from the Fund.
Titled “The music has appears to have stopped globally, and Ghana is scrambling for a chair”, it said policymakers must secure alternative funds soon, considering the country’s diminishing foreign exchange position—at a 12-month low of 3.4 months of import cover.
Furthermore, it said short-tenors and quick rollovers of local currency debt present an immediate concern.
Secondly, local currency bonds have short-tenors and high rollover frequencies, which could immediately destabilise the fiscus or 'money bag' if not addressed.
Another option, it said, is for Ghana to fund a debt rollover through the central bank, “but this scenario would require the BoG’s [Bank of Ghana’s] buy-in, and their funds.”
“At current market levels, it appears the BoG will fund Ghana’s maturing bond repayments”, it stressed.
“Ghana has already secured 80.0% (¢28.0bn) of the 2022 budget financing from the domestic market, with substantial assistance from the BoG (¢22.0bn - of which ¢11.0 billion is part of an active overdraft facility”, it aded.
“We attach severe currency risk to the BoG stepping in to fund either budget operations or government’s repayment of maturing bonds. Rational investors—aware that fiscal operations are centrally funded—may opt to buy and hold US dollars”, it concluded.
Ghana in June 2022 sought assistance from IMF for economic support
Ghana in June 2022 sought assistance from the IMF for an economic support, due to imbalances within the economy.
The Fund subsequently confirmed to have received a request from the Ghanaian government for economic support.
Latest Stories
-
Kofi Kinaata unfazed by death prophecies
2 mins -
Jospong Group partners Komptech to train over 600 stakeholders on integrated solid waste management
9 mins -
Two East Africans charged in UK migrant deaths investigation
14 mins -
DR Congo legal warning to Apple is ‘first move’ – lawyer
24 mins -
Question Time: Did policing minister confuse Rwanda and Congo?
27 mins -
We need better sets for theatre productions – Omar Sherrif Captan
34 mins -
KPMG report on SML must be published and laid in Parliament – Isaac Adongo to Akufo-Addo
37 mins -
Rainstorm causes havoc in Anloga District
39 mins -
Akufo-Addo nominates new MCE for Krachi East Municipal Assembly
40 mins -
Sunyani Technical University refutes sex-for-grades claim, describes allegation as baseless
50 mins -
I’ll win TGMA Artiste of the Year at the right time – Kofi Kinaata
1 hour -
Meet Fred Amugi’s 100-year-old mother
2 hours -
Nkomor Ghana pilots Medicine Delivery Service at the Ghana Autism Conference
2 hours -
Brazil great Marta to retire from international duty
2 hours -
Otto Addo was forced to accept Black Stars coaching job – Mohammed Polo
2 hours