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Ghana’s External Debt Rework: Government rushed in announcing interim deal with private creditors – Dr Acheampong

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Source:  Myjoyonline.com

 

A political risk analyst, Dr Theo Acheampong has criticised the government for what he calls a hasty decision to announce an interim deal with private creditors amidst the country’s external debt negotiations.

Speaking on JoyNews’ PM Express, Dr Acheampong highlighted significant discrepancies between the government’s assertion of a deal and the actual status of negotiations.

“I think the government, in my view, was hasty to announce to the market that ‘we’ve got an interim deal’ when in reality, it is not a deal,” he said on Wednesday.

He emphasised the necessity for any agreement to pass crucial debt sustainability metrics and benchmarks, which he claims the current arrangement falls short of.

Dr Acheampong pointed out the contradiction between the government’s claims of reaching an agreement and the response from the market, has contested the validity of the purported deal.

“Despite reportage by Bloomberg and other reputable financial media houses, the rhetoric from the government is that “this is not a failure but an ongoing process to arrive at an agreement that is consistent with the debt threshold”.

“But we all know that until you have an agreement that meets those important criteria – the debt sustainability analysis – whatever you’ve agreed with your private creditors is null and void,” he told host Evans Mensah.

Referring to a tweet from the office of the Finance Minister on April 15, which declared, “Ghana and the bondholders reached an interim deal,” Dr Acheampong cautioned against misleading statements that could potentially unsettle the market.

He stressed the importance of clear communication surrounding the negotiations and urged the government to refrain from issuing statements that could further exacerbate market concerns.

Dr Acheampong further noted the significance of any agreement to meet the stringent criteria set by the International Money Fund.

He warned that presenting an agreement that fails to meet the criteria would likely be rejected by the IMF, citing similar instances in countries like Zambia and Sri Lanka.

“I think the process is still ongoing but it is important that the communication around it is very clear and the government desists from issuing any statements that would further spook the market when the reality is that you are nowhere close to getting a deal that meets that debt sustainability analysis,” he cautioned.

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