Former Ghana’s Finance Minister, Seth Terkper has hinted that the engagement that the Akufo-Addo Addo administration is seeking under the International Monetary Fund (IMF) is likely to lead to debt reliefs, whether partial or total debt forgiveness.
Mr. Terkper indicated that the programme is also likely to challenge government’s revenue and expenditure given the growing debt situation.
Speaking on Ghana Tonight show on one of the country’s private owned tv stations, TV3 on Monday, Mr. Terkper explained the programme is likely to be a context of Heavily Indebted Poor Country (HIPIC) bargain considering the country’s debt relief state.
Asked what Ghanaians should expect from the ongoing IMF engagement, the lead minister in the IMF programme under Former President John Mahama answered “I think this is the 17th programme, I think it will be a mixture of a programme in the context of heavily indebted poor countries [HIPC] when you had a lot of debt reliefs, it could be that”.
“It could also be the recent one which the NDC started and the NPP concluded with serious homegrown elements like Sinking Fund, Stabilization Fund and others which we thought should become an element of our fiscal framework. Remember we are talking about debt, Mr. Terkper added.
The Former Ghana’s Finance Minister reminded his Ghanaian audience that debt is the product of revenue minus expenditure; deficit and borrowing and that when you don’t repay, then the debt keeps increasing.
This under pined his projection that the programme will definitely tackle revenue, as well as expenditure
The Ministry of Finance and the Bank of Ghana not long ago started discussions with the IMF for economic support.
Key requirement for the programme is confirmation that Ghana’s debt is on a sustainable path.
This will require a comprehensive Debt Sustainability Analysis (DSA), which is currently ongoing.
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A statement issued by the country’s current Finance Ministry on Monday September 26 said Government of Ghana is putting together a comprehensive post Covid-19 economic programme which will form the basis for the IMF negotiations.
According to the ministry, the programme seeks to establish a macro-fiscal track that ensures debt sustainability and macroeconomic stability.
Source at the Finance Ministry said the government’s negotiations with respect to the IMF-supported programme is commencing this week stressing that leaders are optimistic of progress in the discussions.
“Government remains committed, and shall continue to actively engage all stakeholders, both public and private, in a clear and transparent manner as we seek to fast-track this process”, the source concluded.
Meanwhile the former finance minister Seth Terkper has maintained the country cannot benefit from the kind of support government is seeking with the IMF for obvious reasons.
He cited the Akufo Addo led government’s decline of offer to the G20 Debt Suspension scheme, with IMF/WB at the height of COVID-19 as one such reasons.
“Also, I traced our debt history & cited HIPC as peak, we cannot benefit from any such dispensation today, even as a Lower Middle-Income Country (L-MIC)”, Mr. Seth Terkper wrote in a twit after the television discussion.
