IMF Board to approve $3bn programme next week Wednesday – Prez Akufo-Addo
Ghana has received the Paris Club financing assurance, clearing the way for the International Monetary Fund (IMF) to approve the country’s request for a $3 billion bailout.
The news was welcomed by President Nana Addo Dankwa Akufo-Addo, who expressed optimism that the approval of the IMF would help the country recover economically. Further stating that, the IMF Board will be approving the $3bn programme for Ghana by next week Wednesday, May 17, 2023.
“Today is a very special day in the recent history of Ghana. At along last today, we have been informed that the last hurdle towards our agreement with the Fund has been overcome, which is that the Paris Club met today in Paris with the creditor’s committee co-chaired by China and has okayed and approved Ghana’s request of the IMF.
“It means that hopefully, next week Wednesday the Board itself will meet and give final approval,” remarked the President addressing members of the Ghana Catholic Bishop Conference at the Jubilee House in Accra on Friday, May 12, 2023.
The creditor committee, co-chaired by China and France, has urged private creditors and other official bilateral creditors to commit to Ghana’s deal without delay. This request was made after the creditor committee agreed to provide the debt assurances needed for Ghana to secure the $3 billion bailout from the IMF. In a statement, the creditor committee stressed that the Ghanaian authorities are expected to seek debt treatments from all private creditors and other official bilateral creditors on terms at least as favorable as those being considered by the creditor committee, in line with the comparability of treatment principle.
To ensure the quick implementation of the resolution, a creditor committee for Ghana has been formed by countries with eligible claims. The creditor committee is expected to be co-chaired by China and France. The creditor committee examined the macroeconomic and financial situation of Ghana, including its long-term debt sustainability, and its formal request for a debt treatment under the “Common Framework for Debt Treatments beyond the DSSI” endorsed under the Saudi G20 Presidency in November 2020, which was also endorsed by the Paris Club.
The approval of the IMF will put Ghana in a strong position to make other arrangements to help its economy recover. The President of Ghana noted that the sacrifices made by the country over the last year may finally pay off, and Ghanaians will see massive economic recovery. The President also encouraged multilateral development banks to maximize their support for Ghana to meet its long-term financial needs.
Ghana has been hit hard by the COVID-19 pandemic, with the country’s economy contracting by 1.1% in 2020, compared to growth of 6.5% in 2019. The country’s public debt has risen sharply, and the government has been seeking support from the IMF to help stabilize the economy.
The approval of the IMF will be a crucial step in Ghana’s economic recovery, and the country will need to continue to make difficult decisions to ensure its long-term financial stability. The private creditors and other official bilateral creditors will also need to work with Ghana to negotiate debt treatments that are at least as favorable as those being considered by the creditor committee, in line with the comparability of treatment principle.
Overall, the news of Ghana securing the Paris Club financing assurance is a positive development for the country, and it is hoped that it will pave the way for a strong economic recovery in the years ahead.
