Former finance minister, Seth Terkper
A former Minister of Finance, Seth Terkper, has said that the proposed renegotiation of Ghana’s International Monetary Fund (IMF) programme will focus on extending the completion date and creating avenues for borrowing.
President-Elect John Dramani Mahama has committed to pursuing this initiative upon taking office in 2025.
Speaking on JoyNews, Terkper said the government would prioritise a return to sustainable borrowing practices.
He described the current reliance on short-term borrowing, particularly Treasury Bills, as unsustainable.
“The situation where you are almost 100% dependent on three months borrowing is unsustainable. But that’s what’s happening.
“We are predominantly dependent on Treasury Bills. We have stopped going to the bond market, even our own domestic bond markets,” Terkper noted.
Terkper explained that the goal of the incoming administration is to stabilise the economy by setting tougher targets and returning to the debt market.
He stressed that as a developing country, Ghana cannot rely solely on current revenue to develop its economy and must borrow strategically.
“If you don’t give yourself those tougher targets, you may not be able to return to the debt,” he added.
He also pointed out that with Ghana’s three oil fields, more should have been allocated to the repayment mechanism to avoid defaulting.
“With three oil fields, we ought to have put more into the repayment mechanism. We would not have defaulted,” Terkper added.
The IMF has expressed openness to renegotiating Ghana’s $3 billion financing programme with the incoming administration, provided that the accompanying reforms are not jeopardised.
This renegotiation aims to smooth out the repayment of restructured loans and reduce the tax burden on corporations.
As Ghana prepares for the new administration, the focus will be on achieving economic stability and ensuring that borrowing practices support long-term growth and development.
ID/AE
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