IMF boss Kristalina Georgieva welcomes Creditor Committee’s financing assurances for Ghana
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has welcomed the statement from the Official Creditor Committee for Ghana, signalling the importance of an IMF-supported economic programme. The committee has committed to negotiate debt restructuring terms accordingly, providing the necessary financing assurances for the IMF Executive Board to consider the proposed Fund-supported programme and unlock much-needed financing from Ghana’s development partners.
Kristalina Georgieva strongly endorsed the committee’s call for private creditors and other official bilateral creditors to commit to comparable debt treatments. She believes that the committee’s action recognises the Ghanaian authorities’ strong reform programme, which aims to restore macroeconomic stability and debt sustainability while laying the foundation for an inclusive recovery. It also signals that further progress is being made under the G20 Common Framework, demonstrating that international partners are ready to work together to help countries resolve their debt issues.
This news follows the IMF’s staff-level agreement with the Ghanaian authorities on a new arrangement under the Extended Credit Facility on December 12, 2022. Board consideration of Ghana’s programme request has been pending financing assurances from Ghana’s official bilateral creditors.
Ghana has been one of the hardest-hit African countries by the Covid-19 pandemic, with economic activity slowing down, revenues dwindling and public debt increasing. The country’s government is hoping to overcome these challenges with the help of a $3 billion bailout from the IMF, which was approved following a meeting of the Paris Club in May 2023.
The creditor committee, which includes co-chairs China and France, has examined the macroeconomic and financial situation of Ghana, including its long-term debt sustainability, and its formal request for a debt treatment under the G20 Common Framework for Debt Treatments beyond the DSSI. The committee supports Ghana’s envisaged IMF upper credit tranche (UCT) programme and its swift adoption by the IMF Executive Board to address Ghana’s urgent financing needs. The committee also encourages Multilateral Development Banks (MDBs) to maximise their support for Ghana to meet its long-term financial needs.
The Paris Club, which met in May 2023, has asked private creditors and other official bilateral creditors to commit to Ghana’s deal without any further delay after they agreed to provide the debt assurances needed for Ghana to secure the $3bn bailout from the IMF. The creditor committee stresses that the Ghanaian authorities are expected to seek from all private creditors and other official bilateral creditors debt treatments on terms at least as favourable as those being considered by the creditor committee, in line with the comparability of treatment principle.
The creditor committee’s formation by countries with eligible claims will see to the quick implementation of the resolution. This will help Ghana recover from the economic crisis caused by the pandemic and restore sustainable growth and poverty reduction.
The IMF’s endorsement of the Official Creditor Committee for Ghana’s statement and call for comparable debt treatments marks a positive development for the country’s economic recovery. The agreement between Ghana and the IMF, coupled with the commitment of Ghana’s development partners to provide financing assurances, will go a long way in restoring macroeconomic stability, debt sustainability and inclusive growth.
