IMF says Common Framework effective, cites Ghana’s debt treatment agreement with official creditors
The International Monetary Fund (IMF) says the G-20 Common Framework has begun to deliver on its potential citing encouraging progress in Ghana’s ongoing external debt restructuring negotiations with particular reference to the debt treatment agreement between Ghana and its bilateral creditors.
“The Common Framework has begun to deliver on its potential, with encouraging progress in such countries as Ghana, which recently reached an agreement with official creditors on the treatment of debt,” said the Fund in its April 2024 Fiscal Monitor.
In January 2024, the Official Creditor Committee (OCC) reached an agreement in principle with the Government of Ghana on the terms of the treatment of official bilateral debt.
According to the IMF, the next key step for the country is to reach an agreement with its official bilateral creditors on an MoU consistent with the terms agreed in January 2024.
The IMF in the Fiscal Monitor report asserts that improving fiscal and debt transparency is key to reducing the debt vulnerabilities of countries.
The Fund advised Governments around the world that they should provide more granular and timely information on debt, including the composition of creditors and instruments, exposure to risks (associated with interest rates, exchange rates, and refinancing), and the terms of individual debt contracts.
“Such transparency would allow for adequate assessment of fiscal risks, invite closer scrutiny, and potentially reduce reliance on nontraditional debt instruments.
“For countries in severe debt distress, debt restructuring could play a role in restoring the sustainability of
public finances. Continued international cooperation, including through the Group of Twenty Common Framework and the Global Sovereign Debt Roundtable, is crucial to facilitate an efficient debt restructuring process,” the Fund added.
