Vice President of IMANI-Africa, Bright Simons says it is unlikely for the NPP government to recover should it bow to the pressure of restructuring both domestic and external debt.
That, according to the Analyst would require it[government] to further curb spending “for the next two years and if they did that, they would not be able to win the next election under any circumstance,” he told Bloomberg in an interview.
The opposition largely holds the key to an expedited IMF deal now as reorganization of the nation’s liabilities would require approval from parliament, where there is a turf war in numbers which has simmered since the inception of the 8th parliament.
Beyond this challenge, Bright Simons averred that restructuring debt may drag because the government ought to build consensus ahead of that move.
“Building consensus at the top of the political pyramid takes time because you have to do all the usual Ghanaian dances,” Bright Simons said adding, “You have go to traditional leaders, to religious leaders, to the head of the opposition.”
The most recent IMF debt sustainability analysis, conducted in 2021, found Ghana at a high risk of debt distress and vulnerable to rising debt servicing costs. Interest costs have climbed since then, Fitch Ratings noted last week when it downgraded Ghana’s debt to CC, a junk status.