Ghana Says IMF Deal Needs ‘Tweaking’ After Shortfall Discovery

Ghana’s debt bailout program with the International Monetary Fund may require “tweaking” after the nation’s new administration revealed that 7 billion cedi ($1.6 billion) in expenses were not accounted for by the previous government, the finance minister said.

The country is in talks with the IMF and will seek to finalize an audit of the undisclosed spending by Feb. 15, Minister of Finance Ken Ofori-Atta told reporters in the capital, Accra, on Sunday. Once the financing gap is established, the government will determine how it wants to raise funds for the shortfall, Ofori-Atta said.

“By the end of the IMF visit, the process of discovery and certainty and validation would have gone a long way,” Ofori-Atta said. “The task is a lot more than we anticipated with regards to the arrears.”

Ghana’s new administration under President Nana Akufo-Addo said the country’s budget deficit for 2016 will be close to “double digits” after the discovery of the arrears. The IMF is holding talks with Ghana as part of a $918 million three-year credit deal agreed in 2015 after spending ballooned and revenue from commodities such as oil and gold plunged due to a global slump.

China Talks

The government is in separate talks with China Development Bank Corp. about the country’s financing needs, Ofori-Atta said.

“We’re meeting for a second time with the Chinese Embassy” on Monday, he said. “We’re trying to nail down and look at an enhanced relationship with China to see how they can support the direction in which we’re now going.”

Source: BloombergMarket