The Paris Club is expected to meet in France this week for further deliberations on Ghana’s request for debt relief.
The Paris Club, together with other creditors including China, India, Saudi Arabia, and Turkey agreed in principle to support Ghana.
Ghana hopes that bilateral creditors will consent to enough debt relief to enable the country to tap an International Monetary Fund (IMF) loan package.
$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.
$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.
Meanwhile, Ghana has been commended for efforts to implement difficult but necessary economic reforms needed to address the country’s fiscal imbalances.
The reforms are necessary to enable Ghana get support from the world for its economic recovery programme.
IMF officials said financing assurance from the external Creditors is the only factor holding the approval of Ghana’s $3 billion balance of payment support request.
It has been established that Ghana has met all the pre-conditions needed for its programme request to be approved by the executive board.
In view of this, the officials reiterated calls on creditors to step forward and provide the financing assurances needed for IMF Executive Board to approve the request as soon as possible.
Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva and Director of the Africa Department Abebe Aemro Selassie lauded Ghana at separate events at the IMF-World Bank Spring Meeting at Washington DC in the United States of America
Georgieva, said “To tell you the truth, I am actually quite optimistic. Ghana is going to move; the creditors are going to move; and we (the IMF) are going to move swiftly… so stay tuned and stay positive.”
“IMF is committed to supporting Ghana’s economic recovery and will work closely with the government and other stakeholders to address the country’s debt challenges.
“We know that Ghana has a strong track record of economic growth and has made significant progress in reducing poverty in recent years,”
“We believe that with the right policies and support, Ghana can overcome its current challenges and continue on a path of sustainable development” Georgieva said.
She added that the IMF is committed to providing technical assistance and policy advice to help Ghana implement its economic reform programme.
Selassie explained that the IMF is now comfortable that all of the measures required for it to present the programme to the Executive Board are complete, except for the required financing assurances from external creditors.
He said “We are very encouraged by the steps that the government has taken over the last several months since the program request.
“It’s been a very difficult time of course, very difficult, very significant, measures that have had to be taken, and the initial steps that the government has taken are very encouraging”.
According to him, the challenges that Ghana faces are something that need to be addressed over the course of the programme period over the next three, four years to bring the fiscal deficit to the level it requires.
Emphasizing that the reforms are needed, Selassie explained that initiatives like revenue mobilization that are going to be really important to be done in a multi-year process.
This he said is a really very important first step to reducing the macroeconomic imbalances Ghana faces in a durable saying, “It is really the only way to move beyond having to rely on exceptional financing of the type that the IMF provides.
“We’re very comfortable with all the steps that Ghana has done, and that is why we are also urging creditors to step forward and provide the financing assurances needed for us to present the program to the Board as soon as possible.
“We are very optimistic and keeping fingers crossed this will happen in the next few weeks,” he added.
U.S. Treasury Secretary Janet Yellen called for rapid establishment of a creditor committee for Ghana.
“We have had a very positive and successful mission at the World Bank/IMF Spring Meetings, with a lot of goodwill and support for our economic programme.
“I am expectant that we will hear good news about financing assurances very soon to enable us present our programme to the IMF Board for approval”, Mr Ofori-Atta said in an interview from Washington D.C.
Ghana’s participation in the spring meetings also saw the formal unveiling of the roadmap of the Accra-Marrakech Agenda which will culminate at the World Bank-IMF Annual Meetings in Marrakech, Morocco in October 2023.
On the sides of the Spring Meetings, the Ghanaian government delegation also met with officials of the US treasury, private sector investors, the IFC, the USDFA and the US EximBank, as part of efforts to strengthen the ties of friendship and economic cooperation between the two nations.