Ghana gets creditor assurances to pave way for IMF bailout

Ghana’s Creditor Committee, co-chaired by China and France, has asked private creditors and other official bilateral creditors to commit to Ghana’s debt treatment without any delay.
The committee, made up of countries with eligible debt claims on Ghana, in a joint statement said that it had examined Ghana’s macroeconomic and financial situation, including its long-term debt sustainability.
It also indicated that it had examined the country’s formal request for debt treatment under the “Common Framework for Debt Treatments beyond the DSSI” endorsed under the Saudi G20 Presidency in November 2020, which was also endorsed by the Paris Club.
It offered support for Ghana’s proposed International Monetary Fund’s (IMF) upper credit tranche (UCT) programme and its prompt approval by the Fund’s Executive Board.
It, therefore, encouraged “Multilateral Development Banks (MDBs) to maximise their support for Ghana to meet its long-term financial needs.”
“Consistent with their national laws and internal procedures, creditor committee members are committed to negotiating with the Republic of Ghana terms of a restructuring of their claims to be finalised in a Memorandum of Understanding (MoU), in accordance with the “Common Framework for Debt Treatments beyond the DSSI”,” it added.
According to the comparability of treatment concept, the credit committee has urged Ghana to request debt treatments from all private creditors and other official bilateral creditors that are at least as favourable as those being evaluated by the committee.
IMF view
In a separate release, the IMF welcomed the announcement from the Creditor Committee for Ghana on the importance of an IMF-supported economic programme, together with its commitment to negotiate debt restructuring terms accordingly.
The IMF Managing Director, Kristalina Georgieva, said that the response from the committee provides the necessary financing assurances for the IMF Executive Board to consider the proposed Fund-supported programme and unlock much-needed financing from Ghana’s development partners.
I also strongly endorsed the call by the official Creditor Committee for private creditors and other official bilateral creditors to commit to comparable debt treatments.
Adding her voice to calls for private creditors and other official bilateral creditors to commit to comparable debt treatments, she noted that the decision was proof of the commitment of international partners to resolve the debt issues of other countries.
“The Creditor Committee’s action recognizes the Ghanaian authorities’ strong reform program, which aims to restore macroeconomic stability and debt sustainability while laying the foundation for an inclusive recovery,” Madam Georgeiva said.
“It also signals that further progress is being made under the G20 Common Framework, demonstrating that international partners are ready to work together to help countries resolve their debt issues. This is vital to enable countries such as Ghana to achieve sustainable growth and poverty reduction,” she added.