It appears Ghana is yet to face another big hurdle in its External Debt Restructuring Programme (EDRP), with the German Government spelling out more conditions that the country needs to fulfill in getting its assistance to persuade China on its behalf.
Ghana, as part of its efforts towards relieving the nation has decided to embark on a trip to China to discuss how it will restructure its debt of $1.7 billion, owed its creditors.
Meanwhile, Daniel Krull, German Ambassador to Ghana, indicated that his country is only willing to help Ghana embark on its Mission to China under the fulfillment of certain conditions.
“First of all, we insist that those measures that can be taken here in this country have to be taken. The second condition is that, yes, we are willing to take our share of responsibility as one of the major bilateral donors to Ghana but only if all the others also join in this effort.
“There is a multilateral framework that was set up exactly for these kinds of crises. We urge and try to convince all stakeholders in this process to stick to this agreed framework. It’s the G20 framework.”
Mr. Krull
This reaction from Mr. Krull follows President Akufo-Addo’s call on German Finance Minister, Christian Lindner, to “encourage” China to accept Ghana’s proposal for debt relief with its largest external creditor, China.
In response, Christian Lidner, German Finance Minister, said its government has “a vital interest in the success of the Ghanaian economy and wants to see West Africa as a whole stay stable”, adding that with Germany as Ghana’s second largest bilateral creditor, it is ready to support Ghana’s effort to bounce back economically.
Krull Points to the Energy Sector In Ghana As the Biggest Loss Maker
German Ambassador to Ghana, in spelling out the conditions it requires of Ghana to satisfy, hit the nail hard on the country’s Energy Sector, indicating that it is the sector responsible for the nation’s biggest losses.
“The biggest loss maker in Ghana is the energy sector. In this sector alone, each year, 1.5 billion in new debt is piled up. So if that is not solved and you can ask the IMF for $10 Billion, you still will not solve the problem in the medium term.
“So there has to be an answer in Ghana to the 50% technical and non-technical losses in the energy sector. If that is not resolved, I don’t see how we can make find a sustainable solution for the financial problems of the country.”
Mr. Krull
This submission from the German Ambassador came when he was asked to lay bare the terms of the domestic conditions that Ghana needed to satisfy. The next condition Mr. Krull spelt out was the government giving focus to boosting its revenues.
“Ghana has one of the lowest tax to GDP ratios, not even 13%. So we have been cooperating with the local authorities and setting up a very smart system of property tax collection.
“So I think that is an important way forward and this has to be done and processes and decision making done faster to meet the goals, to be able to meet the targets that have been agreed with the IMF”.
Mr. Krull
The Ambassador also noted that he’s still amazed at how the procedures for setting up the budget is done and seems not to get how it works, however, expressed confidence in new opportunities that will be created to enhance economic growth through the necessary policy interventions.
Ghana’s engagement trip to China this weekend has however been postponed by the Finance Minister, Ken Ofori-Atta to a later date – March ending, due to a National Congress meeting held in the Asian country.
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