According to Kojo Oppong Nkrumah, Ghana’s information minister, the much expected debt sustainability analysis (DSA), which is required for a bailout program with the International Monetary Fund (IMF), has been finished.
The DSA will specify the entire amount of debt owed by the nation and the steps that must be taken by the executive branch to reduce it to a manageable level.
In an interview with 3Business, Mr. Oppong Nkrumah, who is also an MP for Ofoasi-Ayirebi, said, “The debt study has been finished, and the details will be announced soon.
The IMF is looking to lend $3 billion to Africa’s second-largest gold producer in order to help with its balance of payments and recover access to the capital market.
However, the government has been forced to restructure the liabilities in order to obtain aid from the Washington-based lender because the debt, which totals over GH400 million ($38 billion), has been judged unsustainable.
Sharp sales of government assets and panicked withdrawals from the capital market have been spurred by speculation about the debt readjustment and potential losses for bondholders.
Due to this, the Cedi has lost more than 55% of its value versus the US dollar this year, fueling inflation (37.2% in September), which has now exceeded the central bank’s goal range for 15 straight months.
However, investors were reassured by President Nana Addo Dankwa Akufo-Addo that the anticipated debt restructuring would not lead to a haircut.
In a televised speech to the country on Sunday, October 30, he added, “I also want to ensure all Ghanaians that no individual or institutional investor, including pension funds, in Government treasury bills or instruments will lose their money, as a result of our continuing IMF negotiations.
The government and IMF are committed to reaching an agreement “as soon as practical,” according to a statement released by the Finance Ministry on Monday.