Ghana will have to pay more to the International Monetary Fund (IMF) program after the Bretton Woods institution recently raised the interest rate on the Special Drawing Rights (SDR) from 0.8 percent to 2.99 percent.
The increase means Ghana and all IMF member countries seeking loan contracts from the fund will now have to pay more.
The new rates are effective from January 6, 2023.
Ghana is currently seeking a $3.0 billion IMF support program that will last for three years to revive its struggling economy.
This means that the nation will pay 2.99 percent interest on $3.0 billion over a period to be determined by the terms and conditions of the Fund.
Currently, the country is seeking debt cancellation through the G20 Common Framework program, although only poor countries are eligible.
Outstanding IMF loan in Ghana
Ghana’s loan to the IMF decreased slightly to $1.68 billion at the end of October 2022.
According to the Fund’s Quarterly Finances, the country is still ranked number one in Africa with the largest debt to the IMF.
Outstanding debt represents eight percent of the total number of African countries that owe money to the Fund.
Ghana has gone to the IMF sixteen times. The country was pushed to the 17th IMF for a bailout because its debt had reached unsustainable levels.
This has forced the country to carry out a Debt Exchange Program starting this year as part of the requirements to access IMF funds to balance the budget and provide short term space.
The government has announced an extension of the deadline for the expiration date of the Debt Exchange program until January 16, 2023, which was originally set to end on December 30, 2022.
It also announced the decision to modify the invitation to the exchange to include individual bondholders.
As part of the DEP, the government has also announced a GH¢15 billion fund to support the financial sector especially banks which are expected to be affected by the programme.
Source: graphic.com.gh
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