Ghana hopes to get IMF deal by next week

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Ghana hopes to get IMF deal by next week

Ghana hopes to get an IMF agreement by next week: finance ministry official ACCRA Reuters said that Ghana's economic recovery efforts could be delayed and complicated if a visiting team from the International Monetary Fund IMF leaves without a staff-level agreement next week.

An IMF team is in Ghana until Tuesday as the country tries to negotiate a relief package before the end of the year to help relieve its debt distress and overcome its worst economic crisis in a generation.

On Monday, Ghana announced a domestic debt exchange hoping that the move would help restore macroeconomic stability.

Treasury and debt management director Samuel Arkhurst told reporters on Wednesday that the IMF had no influence on Ghana's decision to undergo a domestic debt restructuring.

The International Monetary Fund did not respond to a request for comment.

Arkhurst told Reuters earlier that the consequences for those who don't voluntarily participate in the domestic bond exchange were still being negotiated, but there was no plan to go to parliament to force domestic bondholders to participate.

Arkhurst told reporters that if the holdouts are large, we will be in trouble.

The government reserves the right to ensure that non-tendered eligible bonds do not benefit from their non-participation to the Domestic Debt Exchange, including through additional regulatory measures or a more coercive approach, according to a slide presented at the briefing.

A bank recapitalisation will definitely happen, with the central bank currently negotiating with commercial banks as to what shape it will take, according to Arkhurst.

The Bank of Ghana said on Wednesday that it is creating a financial stability fund with a target size of 15 billion cedis $1.20 billion to provide liquidity to financial institutions that participate fully in the debt exchange.

After an IMF deal has been secured, Arkhurst said that the World Bank will contribute to the fund and that other international financial organisations will follow.

The West African producer of gold, cocoa, and oil is aiming to reduce its debt-to- GDP ratio from 100% to 55% by the year 2028, as it struggles with interest payments that have soared to between 70% and 100% of revenues, while the cedi has tumbled and inflation has gone up.

The cedi lost 50% of its value this year, but showed signs of recovery after the latest IMF staff visit was announced last week. Refinitiv Eikon data showed the currency trading at 12.50 to the dollar on Wednesday, compared to 14.00 a week ago.

Public debt was 467.4 billion cedis or $48.9 billion in September, of which 42% were domestic debt, according to the most recent central bank figures released last month.

The finance ministry said that Ghana plans to exchange local dollar bills, cocoa bills and domestic non-marketable debt at a later stage.

The finance ministry said in a Q&A statement that bills and domestic non-marketable debt would be exchanged under similar terms to the domestic bond restructuring announced on Monday.

The government of Ghana is planning to restructure its foreign debt, including $13 billion of Eurobonds that have traded at deeply distressed levels of below 50 cents on the dollar for months, but has not yet set out proposals.