The International Monetary Fund said Ghana remains at a high risk of debt distress as the West African nation plans to clear arrears owed by energy utilities through the sale of a 10 billion cedi ($2.3 billion) local-currency bond.
Ghana and the Washington-based lender are in talks over the terms of a three-year debt-support program that is scheduled to conclude in April 2018 as the world’s second-biggest cocoa producer’s debt rose to 73 percent of gross domestic product at the end of last year. The government said last month that it may issue a bond through a special-purpose vehicle to clear the debts that the state-owned electricity company and petroleum service providers owe to banks and other credit providers.
“The part of the bond used to finance the debt and arrears accumulated by the state-owned enterprises themselves would increase the stock of government debt,” the IMF said Wednesday in an emailed response to questions. “Ghana remains at high risk of debt distress. Continued fiscal consolidation would be required to bring public sector debt on a clearly declining trajectory.” Read the full story here.