China, France co-chair creditor committee; directs private and bilateral creditors to negotiate debt treatments with Ghana
The Official Creditor Committee for Ghana formed by countries with eligible claims on the country has been formally established with China and France co-chairing the committee.
The committee, in a joint statement issued on Friday, May 12, 2023, urged private creditors and other official bilateral creditors to commit without delay to negotiate with Ghana on debt treatments that are crucial to ensure the full effectiveness of the debt treatment for Ghana under the Common Framework.
The creditor committee also expressed support for Ghana’s envisaged IMF upper credit tranche (UCT) program, which is designed to address the country’s urgent financing needs. The committee has also encouraged Multilateral Development Banks (MDBs) to provide maximum support to Ghana to meet its long-term financial needs.
It is important to note that the creditor committee expects the Ghanaian authorities to seek from all private creditors and other official bilateral creditors debt treatments on terms at least as favorable as those being considered by the creditor committee. This is in line with the comparability of treatment principle, which seeks to ensure that all creditors are treated fairly and equitably in debt restructuring processes.
The creditor committee examined the macroeconomic and financial situation of Ghana, including its long-term debt sustainability. The country has made a formal request for a debt treatment under the “Common Framework for Debt Treatments beyond the DSSI,” which was endorsed under the Saudi G20 Presidency in November 2020 and by the Paris Club.
The creditor committee members are committed to negotiating with the Republic of Ghana on terms of a restructuring of their claims. The aim is to finalize the terms in a Memorandum of Understanding (MoU), in accordance with the “Common Framework for Debt Treatments beyond the DSSI.” It is important to note that creditor committee members will negotiate the terms of the restructuring according to their national laws and internal procedures.
The establishment of the creditor committee for Ghana is a significant development in the country’s efforts to address its debt issues. With the support of creditor countries and international financial institutions, Ghana can move towards a more sustainable debt position, which will enable it to invest in its economic development and provide much-needed support to its citizens. As Ghana moves forward with its debt restructuring efforts, it will be important for all stakeholders to work together to ensure a fair and equitable outcome for all parties involved.
