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Ghanaian CSOs call on IMF to support debt cancellation

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Ghanaian civil society organisations (CSOs) have called for the cancellation of Ghana’s debt rather than a bail out from the International Monetary Fund (IMF).

A statement issued by the coalition of CSOs and copied to the Ghana News Agency said any IMF loan must include debt cancellation to make Ghana’s debt sustainable.

The Ghanaian signatories to the statement include the Integrated Social Development Centre (ISODEC), Caritas Ghana, ActionAid Ghana, Faith in Ghana Alliance, Tax Justice Coalition Ghana and the AbibiNsroma Foundation.

The international supporters include Caritas Africa, Debt Justice UK, the Asian Peoples’ Movement on Debt and Development, Eurodad and the Global Call to Action Against Poverty.

Ghana entered negotiations with the IMF on a new loan, following high level of debt and inflation caused by the global food and fuel crisis.

It said meanwhile the rising value of the dollar was increasing debt repayments, and that unless a debt restructuring takes place, any IMF loan would be used to pay high interest rates to private lenders.

Mr Bernard Anaba, the Public Policy Specialist at the Integrated Social Development Centre (ISODEC), said: “Past IMF loans have helped pay high interest debt to private lenders, while not ending Ghana’s debt crisis.”

“This time it is the people of Ghana who must be bailed out, not the profits of rich lenders.

“That means cancelling debt alongside protecting and expanding vital public services and social safety nets.”

Madam Heidi Chow, Executive Director of Debt Justice said: “Speculators lent to Ghana at high interest rates and bought debts at low prices”.

“They took this gamble to reap lucrative returns but they lost their bet and they now need to take responsibility by cancelling Ghana’s debt.”

The statement said Ghana’s Government external debt service had increased from around five per cent of revenue from 2007-2012 to over 40 per cent in 2021, well over the IMF threshold for debt sustainability of 18 per cent of government revenue.

It said Ghana was due to pay $1 billion in external interest payments in 2022, 90 per cent of which were to private lenders.

It noted that Ghana’s high interest Eurobonds had been bought and sold on financial markets at well below face value since autumn 2021, reaching less than 50 cents on the dollar by June 2022.

It said this means if paid in full, bondholders will make super profits out of Ghana, both from the high interest, and from buying the debt cheaply.

The statement said Ghana’s bonds were all governed by English law, which means the UK could pass legislation to enforce any debt restructuring on private lenders.

It said the IMF to lend to a country with an unsustainable debt that country must seek a debt restructuring to make it sustainable.

“If creditors refuse to participate in such a debt restructuring, the IMF can still lend, so long as the country defaults on recalcitrant,” the statement said.

Source: GNA

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