The International Monetary Fund (IMF) has urged Ghana’s creditors to hasten to grant the financing assurances needed promptly, so the Board of the Bretton Wood institution can approve the cocoa, gold and oil-producing West African country’s $3-billion extended credit facility to restore economic stability to the nation.
“We’re calling on bilateral creditors to support Ghana’s effort to restore debt sustainability, form an official creditor committee, and deliver the necessary financing assurances as soon as possible”, the Fund’s communications director Julie Kozack told journalists at a news briefing in Washington DC, last week Thursday, March, 23.
Ms Kozack answered: “So, on December 12th, 2022, the IMF reached a staff-level agreement with Ghana on a three-year programme supported by an arrangement under the ECF. This programme was worth about $3 billion”.
“Ghana also requested a debt treatment under the G20 Common Framework”, she noted.
She said: “Financing assurances from partners and creditors are necessary for presenting the programme request to the IMF’s Executive Board for approval”, adding: “We continue to engage closely with the Ghanaian authorities while they seek these assurances”.
The IMF programme, Ms Kazack indicated, “aims to support Ghana’s efforts to restore macroeconomic stability, debt sustainability while also protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive growth”.
The IMF is working with authorities in several African countries to provide help stabilizing their economies and financial situations spokesperson Julie Kozack told reporters.
Ghana is seeking funding from the Fund with the West African country, struggling with its worst economic crisis in a generation. Ghana secured a staff-level agreement with the IMF in December for a $3 billion loan, but approval is contingent on it restructuring its debt of 575.7 billion cedis ($47.6 billion) and the Fund is now waiting on assurances that reforms will be put in place.
“We continue to engage closely with the Ghanaian authorities while they seek these assurances, and we’re calling on bilateral creditors to support Ghana’s efforts to restore debt sustainability, form an official creditor committee, and deliver the necessary financial assurances as soon as possible. The IMF program aims to support common efforts to restore macroeconomic stability, debt sustainability, while also protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive growth,” said IMF Spokesperson Julie Kozack at her first press conference since taking over as the Fund’s Communications Director.
A few weeks ago, President Nana Akufo-Addo said his government is “making progress on the external debt negotiations” with its development partners “since the government announced an external debt service suspension on 19th December 2022 for certain categories of external debt, to ensure an orderly restructuring”.
The suspension, the president told parliament in his state of the nation address on Wednesday, 8 March 2023, “is an interim emergency measure toward a comprehensive external debt operation which will contribute to the restoration of our debt sustainability in line with our request for a debt treatment under the G20 Common Framework”.
“I want to express our appreciation to the members of the Paris Club and to the Peoples’ Republic of China for the cooperation they have, so far, exhibited to us in attempting to reach an agreement, and in their attempt to establish an Official Credit Committee”.
“We look forward to their fast-tracking the needed financing assurances for IMF approval. We are confident that, with their cooperation, we will reach our March deadline for going to the Fund”, he said.
Already, the government has restructured its domestic debt and now seeking to replicate it on the international front in order to clinch an approval for a $3-billion extended credit facility from the Board of the IMF.
China debt talks ‘very positive’, ‘encouraging’ Ofori-Atta ‘looking forward to securing external assurances very soon’
Ghana’s Finance Minister Ken Ofori-Atta has said his meeting with China on Ghana’s external debt restructuring programme is has been very good so far.
Ghana is seeking debt forgiveness or restructuring of $1.7 billion owed China.
The external debt restructuring programme comes on the heels of a domestic one recently concluded by the government.
It is part of Ghana’s quest to secure a $3-billion extended credit facility from the International Monetary Fund.
Announcing progress of the talks with China, Mr Ken Ofori-Atta’s office tweeted: “So far had very positive and encouraging meetings in China! Looking forward to securing external assurances very soon, even as we pass our outstanding domestic revenue bills back home. Great progress on all fronts…#ResolvingTogether #GhanaFirst”.