Ghana’s Finance Minister bullish on securing external financing assurances from China
Ghana’s Finance Minister, Ken Ofori-Atta, has expressed his optimism about securing external financing assurances from China soon, as he seeks to fast-track the country’s quest for support from the International Monetary Fund (IMF).
The West African nation secured a staff-level agreement with the IMF in December last year for a $3 billion loan, which is subject to bilateral lenders providing financing assurances on existing debts before the IMF board can sign off on the program.
Ofori-Atta has recently led Ghana’s delegation to China for high-level meetings with its Chinese counterparts, aimed at securing the necessary external financing assurances. In a tweet, the minister noted that the meetings have been positive and encouraging, raising hopes for an imminent breakthrough on this critical front.
The government’s push for external financing assurances comes as Ghana faces mounting fiscal pressures, driven by the COVID-19 pandemic and the country’s ongoing efforts to revive its struggling economy.
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.
Ofori-Atta’s confidence in Ghana’s ability to secure external financing assurances is also bolstered by the country’s experience under the common framework for debt treatment. The common framework, established in November 2020, provides a platform for countries to work together on debt relief and sustainability issues, with a focus on promoting transparency and reducing the risks of debt distress.
Ghana’s experience under the common framework has been positive so far, with the country successfully securing debt relief from the G20 nations and other bilateral creditors.
This progress bodes well for Ghana’s efforts to secure financing assurances, as it demonstrates the government’s commitment to sound economic management and its willingness to work constructively with its international partners.
Overall, Ghana’s push for external financing assurances is a critical step in its efforts to secure IMF support and revive its struggling economy. The positive meetings with Chinese counterparts and the government’s track record under the common framework provide reasons for cautious optimism, but there are still significant challenges ahead.
As the country continues to grapple with the COVID-19 pandemic and its economic fallout, the government will need to demonstrate continued commitment to fiscal discipline and reform, while also pursuing innovative solutions to its debt sustainability challenges.
