Ghana, it is clear is going to pay more on its US$3billion loan from the International Monetary Fund (IMF) after IMF increased its lending rate on its Special Drawing Rights (SDRs) to 2.99%.

The IMF from an initial level of 0.89 per cent has hiked its SDR lending rate to 2.99 per cent, representing an increase of 2.1 percentage points.

As a result, Member countries of the International Monetary Fund will pay more in terms of interest rate for loans contracted from the fund.

The new rate which took effect on January 6, 2023, implies that Ghana would have to pay more given that the Bretton woods institution approves its US$ 3 billion loan support .

With Ghana currently seeking an IMF-support programme to the tune of $3.0 billion that will span a period of about three years to revive its struggling economy, the nation based on the new SDR lending rate will pay an interest of 2.99% on the $3.0 billion over a period that will be determined by the terms and conditions of the Fund.

Meanwhile, Ghana is already seeking for debt cancellation via the G20 Common Framework programme, despite only poor nations eligible for it.

Ghana, noted as one of the highly indebted countries in the African region, has secured commitment from international creditors to fast track discussions for possible debt cancellations.

This commitment has seen government press on with talks on the debt cancellation with these developed countries from which they borrow.

Foundations have made it clear that the Paris Club have agreed in principle to engage Ghana on the possible debt cancellation and this discussion is being done through the G20 Debt Framework, championed by the International Monetary Fund (IMF).

Discussions have also revealed that this request has been made by government because, it was one of the ingredients that could fast track the process when it comes to the IMF board approval for the country’s economic program in the first quarter of this year.

This will convince the IMF that going forward, a lot more is being done by government to ensure that it brings its debt to sustainable levels.

Ghana’s Debt Is Likely To Be cancelled

Some financial analysts said that, by looking at the way the discussions are progressing, it is likely that the country could have its debt cancelled. However, it is not clear for now the prevalent condition because this is not the first time the country has gotten its debt cancelled.

Ghana got a similar relief when it signed up to the Highly Indebted Poor Countries (HIPC) initiative of poor countries in the year 2000 which was designed to ensure that the poorest countries in the World were not overwhelmed by the unmanageable or unsustainable debt burdens.