IMF Loan Support Programme: No Need To Panic

Dr Patrick Asuming, an Economist, has asked Ghanaians not to engage in “unexpected cash withdrawals” (panic withdrawals) as the Government prepares for debt restructuring.

Dr Asuming, who is a Senior Lecturer at the University of Ghana, told the Ghana News Agency that the Government would go for domestic debt restructuring as part of the negotiations for an IMF loan support programme.

He said the Government would avoid external debt restructuring because it would affect the country’s reputation in the external capital market and its ability to quickly return to the market – which is currently closed to Ghana.

“The Government is really between a rock and hard place, but it’s more likely to have a domestic debt restructuring.

The Senior Lecturer said the Government would have to negotiate with domestic financial institutions for either an extension to pay its debt or reduce the amount to pay back – be it the principal or interest payment.

He noted that: “Whether the debt restructuring is going to be a delay in payment or reduction, it’s going to affect their (the banks) bottom line – profit, and hamper domestic investors,” the Economist said, but cautioned against panic withdrawals.

At a press briefing in Accra on Wednesday, Mr Ken Ofori-Atta, the Finance Minister, said the Government was yet to conclude processes for debt restructuring with the IMF.