Ghana, IMF deal may not be reached until April

IMF PIXGhana and the  International Monetary Fund  probably won’t come to an agreement on aid until April and the country will struggle to meet revenue targets next year, according to Fitch Ratings Ltd.

Ghana turned to the Washington-based lender as it struggles to narrow its fiscal deficit.

A target to reduce the gap to 6.5 per cent of gross domestic product in 2015 from 9.5 per cent is “exceptionally ambitious,” said Carmen Altenkirch, director of the sovereign group at Fitch.

“I’ve penciled in a figure of 8 percent .The real challenge for them will be raising revenue at a time when the economy isn’t performing well,” she said at a conference in London.

The government would probably finish talks with the lender by February, James Klutse Avedzi, chairman of the finance committee in Parliament, said on November 19.

“The first time, all things going well, that we’re likely to see an IMF programme is April next year,” Altenkirch said, without giving details.

“If they don’t have an IMF program, they won’t be able to issue another Eurobond. Then, you’re going to get a very large drain on reserves,” he said.

 

Budget Financing

Ghana sold $1 billion of January 2026 bonds, priced to yield 8.25 percent, in September, according to data compiled by Bloomberg. That was its third offering in dollars and was issued a few weeks after signaling it wanted IMF aid.

The country’s international  bonds returned 8.7 per cent this year, less than the 10.4 per cent average gain for the Bloomberg USD Emerging Market Sovereign Bond Index.

“After losing access to domestic  capital markets, Ghana was forced to borrow money from the central bank, according to Altenkirch.

“Banks have become net sellers of government paper, while non-banks have purchased only half of what the government was intending. The central bank has financed roughly 90 per cent of Ghana’s budget this year,” she said.

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