Professor of Finance at Andrews University, Michigan, USA, Prof William Peprah, has urged the government of Ghana to utilise part of the country’s $4.2 billion reserves to address outstanding debts to multinational suppliers.
In an interview with the press on Thursday, January 16, Prof Peprah noted that this proactive approach would ease tensions, demonstrate good faith, and secure the next $750 million tranche of International Monetary Fund (IMF) funding.”At least, use some of the $4.2 billion we have in our reserve to start making some of these payments. And this will help Ghana to receive the next $750 million that we are expecting. Bank of Ghana reports on our balance of payment account and net international reserve account, and we have about $4.2 billion. So this is the time that we have to use some of that money to settle these suppliers, and then we will be at peace,” he advised.
In addition to tapping into the reserves, Prof Prepreh urged the government to expedite renegotiation with its suppliers to establish favourable payment terms.
Prof Peprah’s proposal comes as Ghana faces mounting pressure from international stakeholders, including U.S. Senator James Risch, to settle debts owed to American companies as a precondition for continued financial support from the International Monetary Fund (IMF).
According to him, equitable distribution of these funds has been lacking, leading to dissatisfaction among international creditors.
This concern has been amplified by Senator Risch, who recently urged U.S. Treasury Secretary Janet Yellen to leverage America’s position as the IMF’s largest shareholder to demand Ghana repays its debts to American entities.
Senator Risch emphasised that such repayment should be a precondition for U.S. support for further IMF assistance to Ghana.
Prof Prepreh warned that failure to address these concerns could result in the IMF reducing future disbursements to Ghana.
“If the IMF finds that Ghana is not meeting its commitments to international partners, it may take steps to reduce funding. This is why the equitable distribution of IMF support is critical.
