The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva is cautioning Ghana to be mindful in its dealings with its private creditors, warning that a terrible agreement could derail gains made under the programme.
Despite completing a domestic debt restructuring programme the nation is yet to conclude talks with some of its private creditors as part of the $ 3 billion support.
Speaking at a meeting with President Akufo-Addo, Madam Georgieva said “Don’t let the Eurobond creditors twist your arm. Why? because yu have done a very painful domestic debt restructuring to be able to be here, you have agreed on in principle debt restructuring with official creditors of Ghana under certain conditions, the deal with the Eurobond has to be a fair deal otherwise we risk to see what happened in Zambia where, in October I thought the deal was done then the private sector twisted Zambia’s arm and they tried to give them a better deal than the official creditors, they didn’t put their foot down and Zambia lost a lot of time so that is my reflection.”
She added “I would like to share with you two thoughts, the first one is on the critical time for Ghana and the world economy that I had the privilege to be here with you. For Ghana, because the country is coming from a difficult period of high debt, fiscal deficit from the covid shock, and shock from the Russian-Ukraine war but also because, like many countries, Ghana did not appreciate the size of the shock”.
“In an election year, the country must be more than fiscally disciplined to sustain its position. The main lesson from this experience is that you do the right thing now to build the strongest possible foundation for growth for Ghana”, she mentioned.
