Sources say this position of the IMF is based on Ghana's debt limits under the country's current programme with the IMF.

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However, a source close to the IMF told Accra-based Joy FM that “the timing and nature of the deferred payment agreement will be critical for the programme.”

The IMF argues that the deal must be designed in a way that is consistent with the government’s overall debt strategy, value for money and well monitored.

IMF’s response comes after the Minority Members of Parliament wrote them a letter to stop the deal on the basis that it was “illegal”.

Background

The Minority petitioned the IMF to know its verdict on the classification of the Sinohydro deal, the Fund forwarded the issues raised about the deal to its team of experts for advice.

The Minority in their letter said the deal must be stopped because they believe it is illegal.

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But Parliament approved the $2 billion MPSA between the government and Sinohydro Corporation Limited of China for the construction of priority infrastructure projects in Ghana.

The MPSA is essentially a barter facility under which Sinohydro will implement various contracts for Ghana and the state will repay with refined bauxite (alumina/ aluminum).

The objective of the agreement is to improve road infrastructure for enhanced intra-urban, regional and national road traffic flow and pursue rural electrification, affordable housing, and fishing landing sites.

It is also to strengthen economic and regional integration and reduce the cost of doing business in the country.