China expresses interest in resolving Ghana’s debt issues

China’s Foreign Ministry Spokesperson Wang Wenbin has stated that China attaches great importance to resolving Ghana’s debt issues and understands the difficulties facing the country at the moment.

Enhanced communication

“We would like to enhance communication with Ghana to work out a proper settlement through consultation,” he said.

Joint efforts of international partners required to resolve debt issues

He pointed out that properly resolving the issues concerning Ghana’s debt requires the joint efforts of Ghana and all international partners.

Regular Press Conference

Wenbin made the remark a Regular Press Conference held on March 22, 2023, in response to a question on Ghana’s finance minister visiting Beijing for a proposed restructuring of Ghana’s debt.

Ghana-China meeting confirmed

Wenbin confirmed a planned meeting between a high powered Ghanaian delegation led by Finance Minister Ken Ofori-Atta and officials of competent departments of China on bilateral cooperation in relevant areas.

Institutions the delegation will meet

The delegation is expected to hold discussions with officials of the Finance Ministry of China, Central Bank of China, and China’s Eximbank, principally over how to cross the debt restructuring line with China, ideally as part of the common framework with the Paris Club.

Key stakeholders in debt relief efforts

Wenbin stated that China always believes that multilateral financial institutions and commercial lenders, who are the main creditors for developing countries, need to participate in developing countries’ debt relief efforts.

China’s loans account for less than 5% of Ghana’s total public debt

He stressed that official bilateral loans related to China only account for less than five percent of Ghana’s external debt.

$54bn total public debt stock

Ghana’s total public debt stock stands at $54 billion, out of which $28 billion is owed to foreign creditors.

Ghana owes China $1.9bn

Out of Ghana’s $8.5 billion bilateral loans, about $1.9 billion is owed to China.

Important cooperation partner in Africa

Wenbin described Ghana as China’s important cooperation partner in Africa.

Cooperation yielded tangible benefits to both sides

According to him, in recent years, practical cooperation between the two countries has yielded fruitful outcomes and brought tangible benefits to both sides.

Chinese Delegation visited Ghana earlier

In the first week of March this year, a Chinese Delegation was in Ghana for a 3-Day mission to engage the Government of Ghana, following a request for the restructuring of Ghana’s $1.9 billion debt owed to China.

Delegation examined indebtedness to China

The meeting between officials of the Ministry of Finance and their counterparts from China examined Ghana’s indebtedness to China and the possible ways the Asian giant can support the government’s external debt restructuring – a precursor to a bailout from the IMF to resuscitate the economy.

Data sharing

There was data sharing between the two govern­ments, with discussions being held at the technical level, on the parameters of an effective debt treatment.

Ghana’s planned Mission to China

The team visited ahead of Ghana’s planned Mission to China, all in line with ongoing negotiations for a sovereign debt treatment.

Ghana seeking extension of maturities, debt servicing, lower interest rates

Information indicates that Ghana seeking among other reliefs, an extension of the moratorium on debt servicing; an extension of maturities; and lower interest rates.

$3bn staff-level agreement reached in December 2022

In December 2022, the government reached a staff-level agreement with the fund and is now left with board-level approval before it can access the $3 billion support.

Restructuring of domestic and external debt

However, the board-level approval is hinged on the country’s ability to restructure its domestic and external debt.

China remains a key partner for Ghana and it has consistently been a crucial part of the country’s socioeconomic development.

China had supported the country through vital projects that spurred growth and job creation nationwide.

The Chinese delegation, as part of the 3-day Mission met with the Vice-President, Alhaji Dr Mahamudu Bawumia, the Minister for Finance, Mr Ken Ofori-Atta, and technical teams from the Ministry of Finance.

The Chinese Ambassador to Ghana, Mr Lu Kun, also host­ed the delegation at a luncheon yesterday.

In attendance were members of the Chinese delega­tion, the Minister for Finance, Mr Ken Ofori-Atta; Minister of For­eign Affairs, Ms Shirley Ayorkor Botchwey; Ghana’s Ambassador to China, Dr Winfred Nii Okai Hammond, and officials of the Ministry of Finance.