The Ghanaian government said it is taking steps to protect investor profits as it continues to work to finalize a $3 billion loan deal with the International Monetary Fund (IMF).
President Nana Akufo-Addo, who revealed this on Sunday in Accra, said that part of the ongoing negotiations with the IMF is to rule out potential losses for bond investors.
He rebuked speculators who have claimed investors would lose their money because of the impending IMF deal.
Investors have no course for the alarm: According to President Akufo-Ado, unsubstantiated claims by currency speculators have resulted in an increase in cedi liquidations. But he assured Ghanaians that there is no need to panic. He said:
- “I also want to assure all Ghanaians that no individual or institutional investor, including pension funds, in government treasury bills or instruments will lose their money as a result of our ongoing negotiations with the IMF. There will be no haircuts.
- “So I urge you all to ignore the false rumors, just as, in cleaning up the banking sector, the government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits.”
Ghana’s negotiations with the IMF: Nairametrics reported that an IMF team would visit Ghana in the coming weeks to continue negotiations with the Ghanaian authorities for the upcoming three-year loan program. Ghana must agree to take corrective action, including restructuring its liabilities, before it can qualify for the IMF loan.
In a statement released today, Ghana’s Ministry of Finance said the government and the IMF are committed to reaching agreement on a framework and policies for an IMF-backed program “as soon as possible.”
Plan to reduce total debt by 2028: Meanwhile, the president of Ghana has promised that the country’s total public debt will be reduced to 55% of GDP by 2028. He has also promised that the cost of servicing the country’s foreign debt will not exceed 18% of annual revenue by 2028.
The cedi has depreciated 56% against the dollar this year, making it the world’s worst-performing currency. This depreciation is due to foreign investors leaving the country due to concerns about the sustainability of the nation’s debt. As a result, inflation has accelerated. Before the statistical office changed the way it measures price growth, inflation rose for 15 straight months.
To control price growth, strengthen the currency and attract investors, the central bank this year raised its benchmark interest rate by 10 percentage points to 24.5%. For traders, this has translated into higher borrowing costs.