The Board of the International Monetary Fund (IMF) is set to approve Ghana’s US$3 billion programme by May 19, after the country received financial assurances from its external creditors.
The Creditor Committee which is co-chaired by China and France in a release dated May 12, said it had 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 creditor committee supports Ghana’s envisaged IMF upper credit tranche (UCT) program and its swift adoption by the IMF Executive Board to address Ghana’s urgent financing needs.
“The creditor committee encourages Multilateral Development Banks (MDBs) to maximize their support for Ghana to meet its long-term financial needs,” the release stated.
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Consistent with their national laws and internal procedures, creditor committee members are committed to negotiate with the Republic of Ghana terms of a restructuring of their claims to be finalized in a Memorandum of Understanding (MoU), in accordance with the “Common Framework for Debt Treatments beyond the DSSI”
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 favorable as those being considered by the creditor committee, in line with the comparability of treatment principle.
Consequently, the creditor committee urges private creditors and other official bilateral creditors to commit without delay to negotiate with Ghana such debt treatments that are crucial to ensure the full effectiveness of the debt treatment for Ghana under the Common Framework.
The IMF Managing Director, Kristalina Georgieva, also in a statement has welcomed the announcement from the Creditor Committee for Ghana on the importance of an IMF-supported economic program, together with its commitment to negotiate debt restructuring terms accordingly.
She said the statement from the committee provides the necessary financing assurances for the IMF Executive Board to consider the proposed Fund-supported program and unlock much needed financing from Ghana’s development partners.
“I also strongly endorse the call by the Official Creditor Committee for private creditors and other official bilateral creditors to commit to comparable debt treatments.
“The Creditor Committee’s action recognizes the Ghanaian authorities’ strong reform program, 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 is vital to enable countries such as Ghana achieve sustainable growth and poverty reduction,” she stated
On December 12, 2022, the IMF reached a staff-level agreement with the Ghanaian authorities on a new arrangement under the Extended Credit Facility. Board consideration of Ghana’s program request has been pending financing assurances from Ghana’s official bilateral creditors.