President Nana Addo Dankwa Akufo-Addo has expressed his appreciation that the Paris Club has approved Ghana’s request for $3bn bailout from the IMF, which means it is highly likely that the executive board of the Fund will give its approval next week.
This follows China and the Paris Club providing the debt assurances required for Ghana to secure the IMF package.
Furthermore, a creditor committee for Ghana has been set up by creditor nations to ensure the quick implementation of the resolution that ensures private creditors and other official bilateral creditors negotiate to reach at least the same favourable terms that the creditor committee has approved.
Speaking in a meeting with the leadership of the Ghana Catholic Bishop Conference at the Jubilee House in Accra on Friday, May 12, 2023, Mr Akufo-Addo said “Today is a very special day in the recent history of Ghana. At long last today, we have been informed that the last hurdle towards our agreement with the Fund has been overcome, which is that the Paris Club met today in Paris with the creditor’s committee co-chaired by China and has okayed and approved Ghana’s request of the IMF.
“It means that hopefully, next Wednesday the Board itself will meet and give final approval.”
“So the sacrifices that the country has to make this last year, it may be that at long last we are going to see the beginning of the recovery, with the approval of the IMF we will be in a strong position then to make other arrangements to help our economy get back,” he said.
China and the Paris Club have asked private creditors and other official bilateral creditors to commit to Ghana’s deal without any further delay after they agreed to provide the debt assurances needed for Ghana to secure the $3bn bailout from the International Monetary Fund(IMF)
A press statement issued by the Paris Club on Friday, May 12 said “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, it added “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.”
Also, a creditor committee for Ghana has been formed by countries with eligible claims to see to the quick implementation of the resolution. The creditor committee is expected to be co-chaired by China and France.
“The creditor committee 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 statement added.
By Vincent Kubi