Kenneth Nana Yaw Ofori-Atta, Finance Minister of Ghana, has disclosed that conversations with China over Ghana’s debt have so far been very positive and encouraging.
A tweet on the official twitter page of the Finance Minister today, Friday, March 24, 2023, indicated that Ghana is looking forward to securing external assurances very soon as it is in the meantime making progress with its talks with the Chinese government.
“So far had very positive and encouraging meetings in China! Looking forward to securing external assurances very soon, even as we pass our outstanding domestic revenue bills back home. Great progress on all fronts.”
Ofori-Atta
Ofori-Atta travelled to Beijing on Wednesday, March 22, 2023 to meet Chinese officials to discuss a proposed restructuring of Ghana’s debt, according to a source with knowledge of the talks.
On Thursday, March 23, 2023, the Foreign Ministry of China revealed that it would like to enhance communications with Ghana to seek a proper resolution of Ghana’s debt issue.
Spokesperson Wang Wenbin, made the remark in response to a question on Ghana’s finance minister visiting Beijing for a proposed restructuring of Ghana’s debt.
Ghana, which is now experiencing an economic crunch, one of the worst crisis in the country’s records, secured a staff-level agreement with the International Monetary Fund (IMF) in December for a $3 billion loan, although, asking lenders to provide financing assurances is a condition for the IMF’s board to sign off the programme.
As it stands now, China is Ghana’s biggest bilateral creditor with about $1.7 billion of debt. A Chinese delegation visited Ghana this month for initial debt talks, which the finance ministry said were “cordial and fruitful”.
In the meantime, the government’s priority is to secure IMF board approval, with the fine details of debt treatment operations to follow later.
Ghana suspended payments on most of its external debt last year, effectively defaulting, and still needs to negotiate a resolution with its private international bondholders.
The country has though, restructured its domestic debt and has requested to rework its bilateral debt under the common framework platform supported by the Group of 20 major economies, however, an official creditor committee for talks with sovereign creditors is still pending.
Meanwhile the International Monetary Fund (IMF) is also doing whatsoever it can in its capacity as pledged to help Ghana come out of its economic struggles, thus has called on all bilateral creditors to support the country’s efforts to restore debt sustainability, as the country advances towards presenting its economic programme for approval from the IMF Board.
Ghana’s securing of financial assurances from partners and creditors, a necessary tool for IMF Board approval of bailout loan
Julie Kozack, Director of Communications at IMF emphasized strongly on the need of Ghana securing financing assurances from its partners and creditors as a necessary tool towards the presentation of its program request to the Fund for approval. This is what he said:
“We’re calling on bilateral creditors to support Ghana’s effort to restore debt sustainability, form an official creditor committee, and deliver the necessary financing assurances as soon as possible.”
Julie Kozack
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