Ghana secures financing assurances from China and France for debt restructuring agreement
The Finance Minister of Ghana, Ken Ofori-Atta, has announced that Ghana has secured assurances from China and France to proceed with a Memorandum of Understanding (MoU) for the restructuring of Ghana’s external bilateral debts. This means that both China and France are willing to work positively with Ghana on restructuring its debt.
Mr. Ofori-Atta mentioned that Ghana has engaged with the Central Bank Governor of China and has not encountered any opposition or reluctance regarding the MoU for debt restructuring. He also pointed out that the Chinese government has been involved in similar debt restructuring deals with other countries, such as Zambia, Sri Lanka, and Suriname, and he expects cooperation from China in Ghana’s case as well.
“We have met the Central Bank Governor of China and we don’t perceive any opposition or reluctance in participating positively when it comes to the Memorandum of Understanding on restructuring of our external bilateral debts.
“The Chinese government within the past months is close to reaching a similar deal with Zambia, Sri Lanka and Suriname, so following that trend, we expect some similar cooperation from them when it comes to Ghana”.
“We have made tremendous progress under this framework compared to other countries on a similar path,” stated the Finance Minister.
Ghana’s engagement under the G20 Common Framework for debt restructuring has shown progress and mechanisms to address debt challenges effectively. The Finance Minister believes that Ghana has made substantial progress within this framework compared to other countries facing similar debt issues.
As for Ghana’s relationship with the International Monetary Fund (IMF), the country recently reached a staff-level agreement related to the first program review with the IMF. This agreement should pave the way for the disbursement of the second tranche of $600 million under the IMF program, subject to approval by the IMF Board. To secure this approval, Ghana needs to finalize a Memorandum of Understanding with its external bilateral creditors.
China and France are currently the Co-Chairs of the Official Creditor Committee, which was established under the common framework for debt treatment. This committee will work with Ghana to negotiate the terms of debt restructuring. The Government is aiming to restructure around $13 billion in debts owed to these bilateral creditors, with China being the largest holder of external debt, accounting for about $1.7 billion. The Finance Minister is optimistic that the stability of Ghana’s economy will be restored soon, based on government programs and its commitment to fiscal responsibility, particularly during the upcoming election year.
