The International Monetary Fund (IMF) Mission Chief for Ghana, Stéphane Roudet is confident that Ghana will formalize a Memorandum of Understanding (MoU) with the bilateral creditors on the country’s debt restructuring programme in the coming weeks.
He disclosed that some good progress have been made in drafting an agreement with the official creditors.
“We are confident that this will happen in the next few weeks in terms of formalizing what happened in January this year for us to take it to the board in June. We are now more confident, that we will be able to go to the IMF board on Ghana’s programme”, he assured.
Mr. Roudet was speaking to journalists in Washington DC USA, on the sidelines of the Annual IMF /World Bank spring meetings.
Stressing on the June timeline, he stated that all team members are working to make the time.
“It takes quite some time to put together the report, circulate it with the management and the board. We are hopeful that something will happen in June”, he restated.
Discussions with commercial creditors
On concerns about the current negotiations with commercial creditors delaying, Mr. Roudet noted that even though, it is not a major requirement, it is however important to make progress on the debt relief which must be consistent with the IMF programme.
“We also need good faith in place when it comes to the negotiations with the commercial creditors, and we are already seeing that. From that standpoint there is good faith when it comes to negotiations with the creditors”, he announced.
Fiscal discipline in an election year
On containing election spending before the elections, Mr. Roudet said the team is convinced with government’s commitment to be fiscally disciplined.
“If you look at past elections, there has been fiscal slippages and therefore everyone should be concerned”, he added.
He pointed out that the IMF has observed some changes in government’s fiscal commitment.
On high interest rates, Mr. Roudet was hopeful cost of credit will come down if inflation declines in line with the IMF programme.
“We believe that as inflation continuous to go down, that could force the Bank of Ghana to also reduce interest rates”.
He added that government is also reducing the amount of money needed from the domestic market. This he alluded may be contributing to reducing the interest rates.
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