The International Monetary Fund (IMF) has noted that Ghana has track record of repaying debts.
According to the Bretton Wood institution, this record will enable the oil producing West African nation repay the US$1bn COVID-19 facility it lent the country without difficulties.
“Ghana’s track record of servicing debts to the Fund, improvement in macroeconomic stability, and commitment to fiscal discipline over the medium-term suggest that repayment risks are contained.
“Including the proposed disbursement under the RCF, the total amount of outstanding credit from the Fund would amount to SDR 1.512 billion (205% of quota and 39.2 per cent of gross international reserves)”, a staff report and statement by the Executive Director for Ghana, said.
“While repayments to the Fund are projected to rise over the medium-term, peaking at SDR 238.9 million in 2026, they would still remain at 1.1% of exports and 5.2% of foreign exchange reserves”, it added.
The IMF further noted exceptional financing from the IMF and other multilateral institutions would not change Ghana’s risk of debt distress rating.
Liquidity indicators, particularly debt service to revenue ratios, follow a similar trajectory with a 15 percentage points increase in 2020 and slower normalisation over the medium-term, suggesting higher liquidity risk, it emphasised.
However, the outlook is subject to significant risks.
The government’s debt to Gross Domestic Product ratio will rise from 63.2% of GDP at the end of 2019 to 68.7% of GDP at the end of 2020, driven by a wider fiscal deficit and lower GDP.