The Managing Director of the International Monetary Fund (IMF) is urging the Paris Club, the creditor-nations group to hasten the process of establishing Creditor Committee for Ghana for the country’s debt restructuring.
She fears that any delay in forming the creditor Committee by the G20 countries will affect the country’s stability.
According to her, the Creditor Committee is needed to reorganize its external debt of GHC382 billion ($29.1 billion).
“It is now critical to complete Zambia’s debt restructuring, establish a Creditor Committee for Ghana, and advance work with Ethiopia,” the IMF boss made the appeal at the first meeting of the G20 Finance Ministers and Central Bank Governors in Bengaluru, India.
A creditor committee will enable Ghana to formally seek financial assurances from bilateral creditors and gauge their willingness to engage in debt restructuring negotiations.
This is because Ghana is reorganizing its total public debt, estimated at GHC575 billion as part of efforts to secure a $3 billion bailout from the IMF as it has recently completed a Domestic Debt Exchange Programme (DDEP).
The IMF boss appeal comes a day after the German Ambassador to Ghana, Daniel Krull highlighted some of the conditions needed to be met by Ghana before Paris Club members would agree on a debt relief package.
According to him, the country’s bailout request with the IMF would be in jeopardy unless China agrees to a joint debt relief package.
“The Big elephant in the room is China. China is the largest creditor to Ghana and so far it is not supportive of setting up of a creditors’ committee, where the creditors will sit down and agree on an aid package for Ghana,” the German diplomat said during the press engagement.
China is Ghana’s biggest bilateral creditor with $1.7 billion of debt, while the country owes $1.9 billion to Paris Club members.
Finance Minister, Ken Ofori-Atta last week postponed a visit to Beijing for debt relief talks due to the National People’s Congress of China program.
By Vincent Kubi