Ghana stands a risk of losing US support in its ongoing IMF bailout. That’s because US government officials are demanding payment of debt owed to US companies for services rendered to Ghana.
Ghana currently owes in excess of a 100 million dollars after the multinational companies completed services for state owned ECG and AirtelTigo, among others.
A Ranking Member of the US Senate Committee on Foreign Relations, Senator James E. Risch in January urged Treasury Secretary Janet Yellen to leverage the United States’ influence as the IMF’s largest shareholder to demand Ghana repays $251 million owed to American companies before any further IMF assistance.
Despite that leverage not influencing disbursement in January, there are suggestions the continuous delay in paying the US companies is causing growing disaffection in Washington.
US Ambassador Virginia Palmer, in an interaction with journalists in Accra stressed the need for all debts to be settled by the Ghanaian government.
“It’s a tricky thing, because I’m saying on the one hand, stick with your IMF program, fiscal conservatism, and please pay American companies. But that’s a liability. It’s a debt, like other debts,” she said.
For the Ambassador, she is up against a tall order with mounting pressure from Washington for some payments to be made.
“I am anxious that American companies get paid”. “What I’m up against, to be frank, is Senator Risch, who is an important American parliamentarian, but he’s now the chairman of the Senate Foreign Relations Committee. He wrote to our Secretary of the Treasury before the last IMF disbursement and said, oh, don’t vote. The United States is a board member of the IMF. Do not vote for the disbursement while Ghana is not paying its bills.”
She fears the further delay could create a negative business environment for fresh investors.
“It’s important that the government of Ghana know that before new investors come, they call their friends, and the word will get out. Well, you know, it’s a great place, well-educated workforce, wonderful place to live, peaceful, stable, democratic. But I’m owed hundreds of millions of dollars, and no company can sort of face their shareholders with that kind of liability,” she pointed out.
Economist with the University of Ghana, Dr Patrick Asuming, while criticizing the open conversation on the debt situation urged government to focus on engaging the affected companies.
“The government of Ghana should be paying its debt, but I don’t think the IMF funding should be used in paying companies’ debt. I think what government should be doing is to meet all its debtors, all private companies it owes and have conversations about when there will be payments.”
He added that when there are discussions there won’t be problems urging government to be more proactive.
