IMF bailout: Ghana to seal agreement with bilateral creditors soon
Government is yet to reach an agreement with bilateral creditors as part of processes to restructure Ghana’s debt following the US$ 3 billion loan from the International Monetary Fund (IMF).
The process of getting an MoU with the creditors the IMF has said is a crucial step towards bringing the country’s debt to sustainable levels and ensuring economic recovery.
Ghana’s debts to countries including China and members of the Paris Club of creditor nations were $5.4 billion of the $20 billion external debt due for restructuring, as of the end of a 2022.
The country also aims to cut around $10.5 billion in interest payments on its external debt over the next three years to successfully implement the IMF programme.
But, Finance Minister, Ken Ofori-Atta says discussions with the creditors and other external investors are still ongoing adding that negotiations are expected to be finalized soon.
“In the coming weeks, we will seek to complete the MoU on terms with bilateral debt treatment. We expect to finalise these negotiations before the next review, which is in September,” he said, at a press conference on Sunday.
Ghana stopped repaying most of its debts in December 2022 and reached a preliminary deal with the IMF on a rescue package in the same month.
“We’ve successfully worked with the Paris Club and other creditors to determine the parameters for official debt restructuring under the G20 common framework for debt treatment. We are now getting to the process of the actual terms of the MoU. But truly, the type of goodwill and forthrightness we have engaged them over the period, I am confident that we will come with an MoU which is acceptable to the programme.”
Meanwhile, Ken Ofori-Atta has disclosed that the government is expected to receive about $6.2 billion from its multilateral partners between 2023 and 2026.
The Minister disclosed the government has come up with Ghana’s Post-COVID-19 Programme for Economic Growth (PC-PEG) which is backed by the International Monetary Fund and encompasses all the needed reforms to revive the economy.
He indicated that the government is committed to following through with the reforms and expects a total of $2 billion from multilateral partners by the year ending 2023.
Altogether, and including the IMF funds, World Bank and AfDB support, we expect multilateral support of about US$2.0 billion for 2023 and US$6.2 billion between 2023 and 2026. We expect the World Bank to provide a total support of US$1.6 billion whilst the AfDB provides a total support of US$200 million over the programme period.”
The Minister further disclosed “we expect to mobilize catalytic funding of US$30 million in 2023 and US$330 million between 2023 and 2026 from bilateral creditors.”
Source: Ghana Business
