Associate Professor of Finance at Andrews University in Michigan, USA, Professor Williams Peprah, is cautioning that the $3 billion financial bailout from the International Monetary Fund (IMF) will not lead to a swift economic recovery in the country.
This, according to him, is because the managers of the economy will have to follow strict financial restoration plans by increasing revenue as well as tightly controlling expenditure, a key requirement by the IMF.
“That is IMF will strengthen their technical supervision on Ghana to be financially disciplined”, he added.
He welcomed the Financing Assurance to Ghana Creditor Committee under the G20 Common Framework, saying, “It is good news that Ghana will be receiving the needed IMF financial bailout to support the balance of payment challenges”.
He furthered that “what the bailout will do in the next six months is to ensure stable exchange rate that will lead to stable prices, reduce inflation and boost investor confidence economic confidence by investors”.
Professor Peprah concluded that the first tranche of the IMF bailout fund which will be used to settle creditors will help reverse the downgrades of the country’s creditworthiness by the rating agencies.
The Finance Ministry had indicated that Ghana was now ready to go to the Board of the International Monetary Fund for approval of a programme.
This follows the Financing Assurance to Ghana Creditor Committee under the G20 Common Framework.
The creditor committee stressed that the Ghanaian authorities are expected to seek from all private creditors and other official bilateral creditors’ debt treatments on terms at least as favourable as those being considered by the creditor committee, in line with the comparability of treatment principle.
In a tweet, the Finance Ministry said “The Paris Club has today established the OCC (co-chaired by China & France). With the granting of Financing Assurances, Ghana is now ready to go to the IMF Board. Thank you to all our bilateral partners for helping us reach this significant milestone!”
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