The Chinese authorities have expressed their willingness to offer assistance to Ghana’s current short-term liquidity challenges.
The Asian country, China, has also pledged to continue to support Ghana’s medium and long-term developmental aspirations to help the country in reviving its economy.
The Chinese Finance Minister, Mr. Liu Kun, gave the assurance when Ghana’s Finance Minister, Ken Ofori-Atta led a delegation to engage China over a $1.7 billion debt.
“China believes in promoting debt sustainability and sustainable development. We know that these are short-term challenges which we as responsible creditors remain committed to resolving.
“The long-standing and prosperous relationship between Ghana and China imposes on us, a responsibility to help. Chinese authorities have confidence in Ghana’s economic management and its long-term economic viability.”
Mr. Liu Kun
Speaking to his Chinese counterparts, the finance minister of China communicated that Ghana’s Fund programme requires steep fiscal adjustments, debt restructuring, and financing assurances, adding that: “The country had just gone through a painful but necessary Domestic Debt Exchange Programme, with an 85 percent participation rate, which has been a demonstration of the country’s preparedness to take the necessary action to readjust its fiscal path.”
Last week, Mr. Ofori-Atta travelled to Beijing on Wednesday to meet Chinese officials to discuss a proposed restructuring of Ghana’s debt. Ghana’s finance minister revealed that conversations with China over Ghana’s debt have been positive and encouraging.
China’s foreign ministry also revealed on Thursday that it would like to enhance communications with Ghana to seek a proper resolution of Ghana’s debt issue.
Ken Thompson Proposes 15 Years IMF Programme For Ghana
Meanwhile, the Chief Executive Officer (CEO) of Dalex Finance, Mr. Kenneth Kwamina Thompson, has proposed a 15 year IMF programme for Ghana.
According to him, Ghana going through all the stress of restructuring her debt and crying on China to come to her aid, just to secure a loan for 3 years is nothing to write home about, especially when the country can still not be managed within the stated years.
Making the assertion during a conversation dubbed “Ghana’s Looming Financial Crisis: Local or External,” Mr. Thompson noted a 15 year programme is necessary to correct the many structural deficiencies of the Ghanaian economy, rather than securing the $3 billion for just 3 years interim.
Policy makers, he said, given the present and past economic crisis, have shown their inability to effectively manage the Ghanaian economy.
“Left to me, Ghana should undergo a 15 year IMF programme, because we have shown that we cannot manage the economy by ourselves, so the IMF should save us from ourselves.”
Ken Thompson
Ghana, which is struggling with its worst economic crisis in a generation, secured a staff-level agreement with the International Monetary Fund (IMF) in December for a $3 billion loan, though asking lenders to provide financing assurances is a condition for the IMF’s board to sign off the programme.
The government’s current priority is to secure IMF board approval, with the fine details of debt treatment operations to follow later.
With the IMF loan package held up by the need for bilateral financing assurances, securing this external support would be a crucial boost for the government’s economic agenda, allowing it to access much-needed funding to support its recovery and reform efforts.
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