The International Monetary Fund (IMF) has upgraded Ghana’s risk of external and overall debt distress from “high” to “moderate”.
The announcement was made during the completion of the IMF’s final review of the Extended Credit Facility program.
The upgrade reflects successful domestic and external debt restructuring alongside major macroeconomic recovery in Ghana.
However, it still warns that Ghana continue to face significant refinancing pressures and fiscal vulnerabilities.
The warning comes as the government prepares for an unexpected domestic GH¢111billion domestic debt repayment peak over the next two years.
Ghana’s key economic indicators continue to show signs of improvement, although external risks could still put pressure on prices and the local currency.
Meanwhile, Dr Cassiel Ato Forson, the Finance Minister, has said Ghana must make sure it does not go back to the good old bad days by being forced into another emergency bailout arrangement with the International Monetary Fund (IMF).
According to Ato Forson, Ghana risks sliding back into crisis if it fails to sustain ongoing reforms following the conclusion of its International Monetary Fund (IMF) Extended Credit Facility programme.
He highlighted that the government is implementing safeguards to ensure Ghana does not repeatedly resort to external bailouts.
The Finance Minister stressed that Ghana does not want to return to IMF support, adding that discipline must remain a priority.
Speaking at a press briefing on Friday, May 15, Dr Forson stated, “What we seek to do is to make sure that whatever we do today is sustainable, so that we don’t go back to the good old bad days, where we get to an emergency situation that we have to go to the IMF”.
“We are putting in place measures so that we don’t have to go for a bailout. We believe that we do not have a need to go for a bailout every day, but it doesn’t mean we should let our guard. It means that we don’t have to be complacent in order to work harder,” he explained.
“We need to sustain the gains of economic stability to be able to attract private investment into our country and be able to build on it for sustainable growth,” he said.
“So, bailout is out of the equation,” he said.
Dr Forson further recounted Ghana’s past economic challenges, saying, “When I was a deputy minister here, we often said that as for indiscipline, there’s always a price for indiscipline”.
“Clearly, indiscipline is what has landed Ghana on a number of bailout programs, because largely, we depleted our reserves so fast, and then we enjoyed the benefits of consolidation so quickly, and in the end, we’re going back to where we don’t have to be,” he said.
“What we seek to do going forward is to build on the momentum that this ECF has created for all of us and sustain it for a very long time so that the country can benefit from it,” he added.
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