"In 2023 and 2024, respectively, it is predicted that the nation's debt will remain high at 99.7 and 101.8 percent of GDP. Since December 2021, the sovereign spread has widened by 233 basis points as a result of tightening financial conditions worldwide and a decline in the local currency.
Ghana, according to the World Bank, need IMF support worth $1.5 billion (IMF).
According to it, doing so might contribute in stabilizing public finances and regaining access to credit markets.
In its October 2022 Africa Pulse Report, the World Bank highlighted that due to a widening government deficit, a significant depreciation of the cedi, and growing debt servicing costs, Ghana's debt is predicted to increase to 104.6 percent of GDP from 76.6 percent a year earlier.
"In 2023 and 2024, respectively, it is predicted that the nation's debt will remain high at 99.7 and 101.8 percent of GDP. Since December 2021, the sovereign spread has widened by 233 basis points as a result of tightening financial conditions worldwide and a decline in the local currency.
"As a result, the nation was unable to access foreign markets. The IMF needs to lend it $1.5 billion so that it can stabilize its public finances and reclaim access to the credit markets.
The statement said, "However, investors remain concerned about the country's debt sustainability notwithstanding the talks with the IMF.
The country's local and foreign currency ratings were downgraded from B-/B to CCC+/C, expressing these worries. As a result, the cedi continued to decline despite the announcement, which had an impact on inflation.
To address the economic difficulties, Ghana has started talking with the Fund about a program.
At a press conference on September 28th, Finance Minister Ken Ofori-Atta promised that the government will move the program's discussion along quickly.
Negotiations will move quickly in accordance with the President's conversation with IMF Managing Director Kristalina Georgieva, to make sure that important program elements are incorporated in the 2023 Annual Budget Statement in November 2022," he said.
He also said that the government had assembled a five-person committee made up of well-known financial services experts to oversee broad stakeholder interactions across all the major financial sector segments, including banking, asset management, pensions, and insurance.
He stated that the committee members' announcement would be made in the upcoming days.
In addition to ongoing engagements with civil society organizations (CSOs), social partners (labor unions, employers, and FBOs), academia, industry professionals, and the leadership of Parliament, he said, "They will immediately get to work to engage key stakeholders in the financial services sector."
The IMF and Government team are working to revise the medium-term macro-fiscal framework to inform IMF program design, according to Mr. Ofori-further Atta's statement.
Additionally, he continued, they were talking about the structural and policy changes outlined in the economic program that were intended to address the nation's economic problems by fostering fiscal and debt sustainability, long-term and inclusive growth, and social protection.
"Simply put, since we're still working on the debt sustainability review, we haven't come to any agreements with the Fund regarding the specifics of any debt operations.
"As we work to expedite the IMF discussion process, government shall continue to aggressively engage all stakeholders in a clear and transparent manner. To sustain its development goal, Ghana requires a strong domestic financial system, particularly during these three years with constrained access to the international capital market. Consequently, everything
must be done to safeguard our financial industry, and it will be done. There must also be opportunity for a win-win discussion through comprehensive stakeholder involvement with both our domestic and foreign investors. Ghana has always worked with its partners in a cooperative manner, and we shall, I have no doubt, produce a "historic configuration."
