Ghana Will Pay More For Fund-Backed Loans
...As IMF Raises SDR Interest Rate To 2.99%...
Ghana and others, who have applied for loan from the International Monetary Fund (IMF) will pay additional lending rate, as the IMF has increased the yield on its Special Drawing Rights (SDR) by some 210 basis points (2.1%).
This magazine found out It was effected last year, January 6, 2022.
The rate of interest on the SDR has been perged at 2.999%, from the previous 0.89%.
The increase in the interest rate of the SDR means that member countries of the IMF would have to pay more for loans they borrow from the Fund.
Ghana is 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.
It thus means the nation will pay an interest of 2.999% on the $3.0 billion over a period that will be determined by the terms and conditions of the Fund.
In the meantime, the Ghana is already begging for its debt to be cancelled by the G20 Common Framework programme; in spite that, only poor nations are eligible for such policy.
Reuters once stated, Ghana had reached out to the Paris Club of creditor countries in December 2022 to ask for assurances that the Common Framework process, set up by the Group of 20 leading economies in 2020 in response to COVID-19, could be expedited.
The interest rate on the SDR, according to the Fund, is based on the sum of the multiplicative products in SDR terms of the currency amounts in the SDR valuation basket; the level of the interest rate on the financial instrument of each component currency in the basket, and the exchange rate of each currency against the SDR.
AfricaOwn gathered also that, Ghana’s outstanding loans to the International Monetary Fund fell slightly to 1.28 billion Special Drawing Rights (SDR), which is equivalent to $1.68 billion as of the end of October 2022.
Per the IMF’s Quarterly Finances, Ghana is ranked the number one in Africa with the largest outstanding debt to the Bretton Wood institution.
The outstanding debt represents 8% of the total number of African countries indebted to the Fund.
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