Ghana optimistic about $3b IMF Deal

Ghana appears set to secure the $3 billion support facility from the International Monetary Fund (IMF) soon, as responses from key members of the Fund and the country’s external creditors have been positive so far.

Speaking at the ongoing World Bank/IMF Spring Meetings in Washington D.C., the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, expressed optimism that the Fund’s Executive Board would grant final approval to Ghana’s bailout request soon.

To this end, she urged Ghanaians to stay tuned and be positive about the ongoing engagements, assuring that the Fund was pushing the bilateral creditors to quickly provide the financial assurance needed for the Board to approve the deal.

“For Ghana, we have worked very hard and very swiftly to get a programme. We have been urging Ghana’s creditors to act swiftly,” Madam Georgieva.

She commended Ghana and, for that matter, Finance Minister Ken Ofori-Atta for courageous efforts made in engaging the global capital markets, saying the country has a long track record of sound economic management and, therefore, ought to be supported.

“I have to express my appreciation also the proactive role of the Minister for Finance in engaging creditors, and I take every opportunity to personally ask the creditors to act swiftly,” she said.

Burden sharing

Meanwhile, speaking at the Global Sovereign Debt Roundtable (GSDR) discussion, on the sidelines of the IMF/WBG spring meetings David Malpass, WBG President, emphasised the need for equal burden sharing among official bilateral and private creditors and for an acceleration of ongoing restructurings to avoid further default of payments and ensure debt sustainability.

He was confident that the GSDR group could break through the debt impasse, and reach meaningful debt restructuring – through early information sharing by the IMF and the World Bank.

Nirmala Sitharaman, Finance Minister, Republic of India, also called for an upscale in current global efforts, including those of the G-20 to address growing debt distress across the globe.

She said it was important for information to be provided on debt transparency, clarity on the comparability of treatment, predictability and timeliness of the debt restructuring process, as well as ways to assess and enforce the timelines for the steps involved in debt restructuring.

Participants at the meeting included the three co-chairs (IMF, World Bank and India as G20 Presidency), official bilateral creditors (China, France as chair of the Paris Club, Japan, Saudi Arabia, United Kingdom, United States).

Debtor countries (Ghana, Ecuador, Ethiopia, Sri Lanka, Suriname, Zambia), as well as Brazil, the forthcoming 2024 G20 Presidency, and private sector representatives (Institute of International Finance, International Capital Markets Association, BlackRock, Standard Chartered) were also at the meeting.

Ghana’s debt restructuring

Ghana’s path to economic recovery in the wake of the recent crisis is receiving renewed hope from three major global financial and development institutions on debt operations.

The IMF, World Bank Group, and the Group of 20 Presidency (G20) have all pledged to increase concessional financing to Ghana to address the country’s current debt challenges.

The financing support will be extended to other developing countries that are equally going through debt restructuring processes to be more efficient and resilient economically.

Ghanaian authorities in December last year reached a Staff-Level Agreement with the IMF and currently awaiting the Fund’s Executive Board approval for the three-year $3 billion loan-support programme under the Extended Credit Facility (ECF).

The country has completed its Domestic Debt Exchange Programme (DDEP) and engaging its external creditors for financing assurances for the loan facility, which is aimed at restoring macroeconomic stability and protecting the vulnerable.

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