The Director of the Institute of Statistical, Social and Economic Research at the University of Ghana, Prof. Peter Quartey is optimistic that the interest being shown by the International Monetary Fund (IMF) to save Ghana’s economy will boost investor confidence in the country.
The Ministry of Finance on Monday confirmed that its officials and of the Bank of Ghana have commenced a comprehensive debt sustainability analysis with the International Monetary Fund (IMF) for a US$3 billion support programme.
The statement issued by the Ministry explained that the programme seeks to establish a macro-fiscal path that ensures debt sustainability and macroeconomic stability, underpinned by key structural reforms and social protection.
The IMF team is in Ghana until October 7 to continue discussions with the government on policies and reforms that could be supported by a lending arrangement.
This round of engagements coincides with international ratings agency Fitch downgrading the country’s creditworthiness to further junk status, in addition to the already existing problem of inflation and cedi depreciation.
This has heightened calls for the government to among other things, restructure its local currency debt stock as required by the IMF.
News reports indicate that major local investors, including local banks and pension funds, are preparing to engage in discussion on the debt reorganization.
Reacting to this development, the Director of the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Prof. Peter Quartey, is hopeful these steps being taken by the IMF to save Ghana’s dying economy will spice up investor confidence in the country.
“The IMF has its own processes that it goes through to ensure that it comes in to rescue the situation. Some might take six to twelve months. We heard the IMF director say hopefully by December, all things being equal, we’d have the program so we’re hoping for that,” he noted.
“Although given the situation that we find ourselves, we need an injection of foreign currency into the country. But the fact that the IMF is engaging Ghana and there is progress, I believe it’s gradually bringing in some confidence into the economy and I believe some investors, despite the Fitch downgrade, will still be looking at Ghana favourably in the coming months.”