The Finance Minister of Ghana, Mr. Ken Ofori Atta, has embarked on a crucial trip to China to negotiate debt restructuring with officials of the country.
The Finance Minister, who is leading a government delegation, left Accra over the weekend via Addis Ababa where he attended the UNECA High-Level Ministers meeting on Global Financial Architecture.
After that meeting, the Minister is expected to head to China, possibly on March 22, 2023 to continue bilateral talks and seek financial assurances for Ghana’s program with the International Monetary Fund.
This trip is of great significance as Ghana is hoping to restructure $5.7 billion of its external debt, with China holding a third of it – amounting to $1.7 billion. The structure of Ghana’s external debt shows that the country owes China about $1.7 billion, Eurobonds – $13.1 billion and Multilateral – $8.1 dollars. The rest are Paris Club countries, $1.9 billion and other creditors, $3.2 Billion.
Mr. Ofori Atta had earlier held meetings with officials of Exim Bank China in Ghana, all in the line with re-profiling the country’s debt to China. He expressed optimism that a deal can be reached to enable Ghana to present its case before the IMF Board, however, the issue of comparability of treatment is a major concern, especially as China wants to do bilateral.
“The big elephant in the room is China as in how they will comport themselves in the comparability of treatment because China wants to do bilateral. The discussion is on how they [China] can envelop as quickly as possible.”
Mr. Ken Ofori-Attah
The finance minister is hopeful that discussions on how China can envelop as quickly as possible can be resolved in the talks.
The visit was initially scheduled to hold in March but was postponed to the end of the month due to the National People’s Congress of China meeting in early March, 2023.
According to government sources, the Finance Minister’s visit to China marks a step closer to IMF program approval by the IMF Board.
The outcome of the Finance Minister’s talks with China would determine the country’s ability to access much-needed financial support from the International Monetary Fund and other multilateral organizations.
Negotiations With Paris Club
Negotiations with Paris Club members have seen some significant progress, with requisite documentation submitted and the expectation of the formation of a creditor committee expeditiously.
The successful resolution of debt restructuring with all external creditors would be a major boost for Ghana’s economy, as it would reduce the country’s debt burden and provide more fiscal space for the government to implement growth-enhancing policies.
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