According to Professor John Gatsi, dean of the University of Cape Coast’s Business School, Ghana’s foreign creditors are refusing to accept Finance Minister Ken Ofori-Atta’s proposal for a haircut of up to 40%, which is why the second tranche of the $3 billion in cash from the International Monetary Fund (IMF) has been delayed.
Ghana was not able to receive the second tranche of the $3 billion bailout facility by the deadline of November 1st, as stipulated in the IMF agreement. The country is presently in talks with its foreign creditors about a $10.5 billion debt relief package.
Prior to this, the Finance Minister made suggestions to its bilateral creditors, China and the Paris Club, asking for additional debt restructuring and a haircut of up to 40% from its commercial creditors.
Prof. Gatsi stated, “The delay is occasioned by the inability of the government of Ghana and the creditors to agree on what is required of them,” during an appearance on TV3’s Ghana Tonight program, which was monitored on 1Family Radio.
“The Government of Ghana is pleading with the creditors to accept the certain elongation of maturity of the debts and some cuts, about 30 to 40 percent on the interest or the coupons that they expect.’’
He continued, “That is where the disagreement is coming from. As things are, it seems some of the creditors, such as bilateral and multilateral, are sort of soft, but it was also indicated that some creditors are excused from the debt exchange programs; they will not be affected.’’
“It is very difficult for commercial creditors to see a chunk of the interest wiped away; I believe that is where the disagreement is, and they have not come to terms with it yet. That is why we couldn’t meet the target.”
The Ministry stated that the money was intended to support the debt of the country, help reestablish macroeconomic stability, and provide a solid basis for inclusive growth.