Parts of the agreement made by the Ghanaian government and the International Monetary Fund (IMF) have Haruna Iddrisu, the member of parliament for Tamale South, concerned.
When he considered some of the conditions offered, he said the deal was very ambitious.
“It appears to me that the IMF ECF that the government of Nana Addo Dankwa Akufo-Addo and Bawumia has signed is an overambitious one. It is overambitious in the sense that it is going to affect the fiscal space that may be available to a successor government. It may be John Mahama government and NDC government tomorrow,” he said on Joy FM.
The IMF recently approved Ghana’s program request, which asked for $3 billion in Balance of Payment support to stabilize the economy.
He claims that the nature of the conditionalities will have a significant negative impact on the administration that succeeds the current one.
The IMF has demanded that the government track debt issuance by SOEs and public SPVs, limit and monitor collateralized debt issuance, strictly limit borrowing on non-concessional terms, and ensure that debt payments are made on time as part of prudent debt management measures.
As the program lasts for three years, the former minority leader said on Joy FM’s Super Morning Show that he believes this development could upset the plans of whoever comes to power in 2024.
“Inherent in this agreement is that there shall be no non-concessional borrowing between now and 2027… there shall be no access to non-concessionary borrowing. So it means that… for concessional financing, government may not be able to borrow between now and 2027,” Haruna Iddrisu said on Thursday.
According to the legislator, “That is what excessive and reckless borrowing does to an economy apart from the debilitating effect on the private sector on businesses on employment.”
The Fund claims that one of the circumstances that caused Ghana to enter debt distress was that the country violated the Debt Sustainability Analysis (DSA) thresholds.
The Fund claimed Ghana is in debt distress in a statement titled “Request for an arrangement under the Extended Credit Facility Programme.” It also stated that the nation’s debt load is unsustainable.
“Given the ongoing debt restructuring and large and protracted breaches to the Debt Sustainability Analysis thresholds, Ghana is in debt distress, and debt is assessed as unsustainable.”
The IMF continued by stating that Ghana’s fiscal policy was characterized by excessive spending and structurally poor domestic revenue mobilization.
