Finance Lecturer on the College of Ghana Enterprise Faculty, Professor Lord Mensah has expressed fears that Ghana’s already dwindling investor confidence will additional be exacerbated as the federal government struggles to deliver debt ranges to a sustainable path.
The economist’s feedback come on the again of the Worldwide Financial Fund’s (IMF) newest quarterly report which put Ghana because the main borrower of IMF loans in Africa.
Prof. Mensah who attributes the event to Ghana’s steady urge for food for a steadiness of fee help from the IMF quite than funds for economically viable tasks says the nation dangers being in an unfavourable place.
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“I’m not shocked in any respect as a result of anytime we go to the IMF, we go for a bailout. In comparison with different nations that borrow for a objective and put money into areas the place they will get the money flows and repay the mortgage, Ghana borrows for steadiness of fee help whereby we don’t see any bodily exercise.”
Per the report, Ghana’s debt on the IMF elevated by 35 over the interval into account which interprets into 9.55 % of the 17.68 billion Particular Drawing Rights in whole loans nonetheless owed by African nations to the Fund.
“That is debt data so anyone coping with Ghana will likely be cautious as a result of the flexibility to pay dents is set by the quantum of the cash one owes. This rating which places Ghana as the very best IMF borrower in Africa implies that if you’re coping with Ghana by way of extending funds to, you’ll have to watch out and probably if its International Direct Funding, one must take a look at the debt will have an effect on the soundness of the change price”, Prof. Mensah added.
Out of the 5 classes of largest excellent loans as of July 31, 2023, Ghana’s Particular Drawing Rights (SDR) stood at $1.689 billion, increased than the $1.246 billion SDR recorded as of April 30, 2023.
Ghana had repaid SDR 8 million to the IMF as SDR 1 equals US$1.34294.