Ghana’s economy will collapse next week

Ghana’s economy will collapse next week

Should Ghana be unable to successfully restructure its debt exactly a week from now, the economy will come tumbling down.

According to the Finance Minister, Ken Ofori-Atta, Ghana has until March to save the economy – the time it is to receive a credit facility worth $3 billion from the International Monetary Fund (IMF).

Addressing Pensioner bondholders who were displeased over their inclusion in government’s Domestic Debt Exchange Programme (DDEP) on February 6, 2023, the minister said “We need to be mindful that we really need to be successful in going to the fund by this March to avoid what we all experienced last year which we all don’t want to experience again.”

In 2022, Ghana’s economy was characterised by high inflation, doubled depreciation, hiked fuel prices and transportation fare. The economy has been in crisis since then and government needs to restructure its debt to stabilise the economy.

Government has relatively much to do in order to successfully implement its DDEP launched in December 2022.

Last week, government managed to address its issues with pensioners, who had been picketing at the Finance Ministry for about two weeks by excluding them from the programme.

However, government is yet to resolve its challenges with the Individual Bondholders Forum.

According to the bondholders, the government is yet to pay them over GH¢4 billion in interest and principal on which the government defaulted.

They are therefore demanding payment of outstanding bonds that matured on February 6.

They announced that they would be picketing at the Independent Square from February 20-24, 2023.

As of Monday and Tuesday, members of the Forum were not sighted at the said venue.

It is unknown whether they are making headway in their engagement with the government since Finance Minister, Ken Ofori-Atta, has assured that all outstanding coupons will be paid after February 21, 2023.

It is February 22, and there are no reports of the outstanding matured bond being paid.

In the meantime, the government of Ghana is working on having China cancel its debt.

According to the Finance Minister, “China represents about a third of the $5.7 billion loan, and so it is important that we engage them.”

Source: The Independent Ghana

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