IMF welcomes Ghana’s debt resolution deal with external creditors

By Majesty 3 Min Read
IMF

The agreement Ghana reached with its Official Creditors has been welcomed by the International Monetary Fund (IMF).

This action sets the stage for the IMF to examine Ghana’s extended debt facility in an effort to release the $3 billion facility’s next tranche.

Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund, welcomed the announcement made by Ghana’s Finance Ministry that the country’s authorities had reached a preliminary agreement with their official creditors regarding a debt treatment. 

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This agreement aligns with the goals of the programme, which is supported by the IMF and aims to rebuild resilience, restore macroeconomic stability and debt sustainability, and establish the groundwork for more robust and inclusive growth.

“I would like to express my gratitude to China and France, the co-chairs of the Official Creditor Committee, for their tireless efforts in bringing about this agreement. 

Another significant achievement for the G20 Common Framework, which brought together G20 creditors to reach a consensus on debt relief for Ghana, is this.

“With this agreement, the first review of Ghana’s three-year Extended Credit Facility Arrangement will be able to be considered by the IMF Executive Board in the coming days. I’m excited to carry on our productive partnership with Ghana.

Ghana’s second bailout installment

On Friday, the Ghanaian government declared that it had reached a consensus with its official creditors to restore debt sustainability in accordance with the goals of the IMF programme.

After obtaining the first tranche of the IMF bailout in 2023, the government is attempting to obtain the second tranche.

The Ministry of Finance, in a statement dated January 12, 2024, clarified that the agreement falls under the G20 Common Framework, ‘on a Comprehensive Debt Treatment Beyond the Debt Service Suspension Initiative.’

The government is optimistic that the debt treatment, providing substantial relief during the program period, “will enable the allocation of extra financial resources for vital public investments.”

“The Government of Ghana commends the support and cooperation of its Official Creditors in reaching this agreement, which demonstrates a mutual commitment to restoring debt sustainability in line with the International Monetary Fund (IMF) program targets. 

The Government is confident that this debt treatment, which entails significant flow relief during the program period, will allow for the allocation of additional financial resources towards critical public investments.”

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