IMF: It’s good Akufo-Addo says no ‘haircut’ but further clarity needed – UGBS Economist

An economist at the University of Ghana Business School (UGBS), Dr. Patrick Assuming has welcomed the comment by President Nana Addo Danwa Akufo-Addo that there will be no ‘haircut’ as the country seeks a program with the International Monetary Fund (IMF).

He, however, said the President should have provided further clarity on this comment.

He asked whether there is going to be debt restructuring since he has ruled our out haircut.

“It is good the President says there will be no haircut but he should have expanded that comment,” Dr. Assuming told Martin Aseidu Darteh on the Midday news on TV3 Monday, October 31.

He added, “we are in a difficult situation, if we are not doing haircuts, will there be restructuring?”

President Nana Addo Dankwa Akufo-Addo has assured that no investor will lose his or her money including pension funds, government treasury bills, or instruments if Ghana finally seals a deal with the International Monetary Fund (IMF).

Mr. Akufo-Addo noted that some members of the public have concerns that they will lose their investments if the deal with the Fund is closed,

But delivering an address to the nation on Sunday, October 30, Mr. Akufo-Addo allayed the fears saying, just as customers’ deposits were saved during the banking sector clean-up exercise, no one will lose money in this also.

He said “There will be no ‘haircuts’, so I urge all of you to ignore the false rumors, just as, in the banking sector clean-up, the Government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits.

“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 IMF negotiations.”

READ MORE: Social media users unenthused by Akufo-Addo’s address on economic crisis

The Ministry of Finance recently announced that following several meetings held in the last few weeks in the US with the IMF, a “clear path towards the final details of a program has been agreed upon by both parties”.

In a press release on Friday, October 21, the Ministry added that a Staff-Level Agreement is targeted by the end of the year.

“A pathway towards fiscal sustainability has also been extensively discussed, and the Government of Ghana and the IMF remain fully committed to the goal of reaching a Staff-Level Agreement on a Programme, within the shortest possible time.”

On Thursday, October 20, the IMF Mission Team Lead, Stéphane Roudet, described the discussions with Ghanaian officials in Washington DC as “fruitful”.

“We made good progress in identifying specific policies that would restore macroeconomic stability and lay the foundation for stronger and more inclusive growth,” he stated at the end of the discussions.

“The IMF team and the Ghanaian authorities remain fully committed to reaching an agreement on a framework and policies for an IMF-supported program as soon as feasible.”

Mr. Roudet will lead the Team to Accra in the next few weeks for negotiations to continue.

The Finance Ministry urged Ghanaians to continue to be patient “in what is undoubtedly a troubling and challenging time for our economy, and economies globally”.

“Government will continue to work with a fierce sense of urgency to stabilize the economy and place it back on a firm trajectory of growth.”

Last month, the Managing Director of the Fund, Kristalina Georgieva, promised that the $3-billion program being sought by Ghana will be hopefully completed by end of 2022.

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Source:3news.com