The IMF urges external creditors to provide support to Ghana. The goal is to make Ghana’s debt sustainable, and talks with the China and Paris Clubs have been successful. The International Monetary Fund (IMF) has called on all bilateral creditors to support Ghana in this effort.
Talks with China and Paris Clubs
The Ministry of Finance has tweeted that meetings with China have been positive and encouraging, and they are looking to secure external assurances soon while also passing outstanding domestic revenue bills.
The IMF’s Director of Communications, Julie Kozack, emphasized the need for Ghana to obtain financing assurances from partners and creditors before presenting its $3 billion request for approval to the IMF’s Executive Board. Progress has been made on all fronts.
Importance of financing assurances
The International Monetary Fund (IMF) has urged bilateral creditors to assist Ghana in restoring debt sustainability, by providing financing assurances and forming an official creditor committee.
The IMF is engaging with Ghanaian authorities on the progress of its $3 billion programme, which aims to restore macroeconomic stability, protect the vulnerable, preserve financial stability, and foster strong and inclusive growth.
Prior actions fulfilled by the government
The Ghanaian government has already fulfilled three of the five agreed Prior Actions, including a tariff adjustment, publication of the Auditor-General’s report on COVID-19 spending, and the onboarding of the Ghana Education Trust Fund, District Assemblies Common Fund, and Road Fund on the Ghana integrated financial management information system.
The fourth action involves the passage of the Income Tax (Amendment) Bill, Excise Duty and Excise Tax Stamp (Amendment) Bills, which parliament is expected to approve this week.
Domestic Debt Exchange Programme
Lastly, the Domestic Debt Exchange Programme (DDEP) has completed the swapping of GH₵83 billion worth of old bonds for new ones, and Ghana aims to complete a similar exercise with its external creditors, including bilateral partners and Eurobond investors.
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, expressed satisfaction with Ghana’s progress in presenting its SLA for the Fund’s review and approval.
The IMF urges external creditors to provide support to Ghana.
China’s Foreign Ministry Spokesperson, Wang Wenbin, also stated that China attaches great importance to resolving Ghana’s debt issues and understands the difficulties facing the country.
He emphasized that properly resolving the issues concerning Ghana’s debt requires the joint efforts of Ghana and all international partners.
IMF’s positive feedback on Ghana’s progress
A high-powered Ghanaian delegation led by Finance Minister Ken Ofori-Atta is expected to meet with officials of the Finance Ministry of China, Central Bank of China, and China’s Eximbank to discuss debt restructuring. China’s official bilateral loans related to Ghana account for less than five percent of Ghana’s external debt.
The two countries have engaged in practical cooperation in recent years, yielding fruitful outcomes and bringing tangible benefits to both sides. Ghana is seeking among other reliefs, an extension of the moratorium on debt servicing; an extension of maturities; and lower interest rates. China remains a key partner for Ghana’s socioeconomic development, having supported the country through vital projects that spurred growth and job creation nationwide.