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IMF Confirms No Further Adjustments Required from Ghana in Debt Restructuring

Accra, Ghana, October 13, 2023 – The International Monetary Fund (IMF) has clarified that Ghana does not require additional adjustments to reach an agreement with its external creditors for the restructuring of a substantial $20 billion debt. Instead, the IMF asserts that it is the responsibility of creditors to engage with the nation. Ghana is currently awaiting approval from the Fund’s Executive Board for a second tranche of $600 million for its $3 billion loan-support program.

Mr. Abebe Aemro Selassie, the Director of the African Department at the IMF, addressed this matter during a press briefing in Marrakech on Friday, October 13, 2023. He urged creditors to take action and expressed that Ghana had already met its obligations.

Ghana temporarily suspended servicing certain external debts, including Eurobonds, commercial loans, and bilateral loans, in December 2022. The nation has since been awaiting the finalization of debt treatment agreements with its external creditors to resume payments.

Mr. Selassie emphasized, “Action is needed from the creditors’ side; Ghana has done its fair share, and it’s for creditors to take the next steps, and we’re not going to ask the government to do more adjustment because creditors haven’t asked either.” He pledged the IMF’s commitment to provide essential information, enabling creditors to move forward swiftly and facilitate the Fund Staff Mission’s presentation to the Board as soon as possible.

Comparing Ghana’s situation with that of Zambia, Mr. Selassie noted that the creation of the Official Creditors Committee had been a relatively rapid process in Ghana, enabling progress and a timely Board approval of the program.

The IMF’s African Director expressed satisfaction with Ghana’s progress since the program received Board approval in May 2023. He highlighted that, before commencing the $3 billion loan-support Post-COVID-19 Program of Economic Growth (PC-PEG), Ghana had taken significant steps to address the underlying macroeconomic imbalances that were the root causes of the ongoing crisis.

Currently, government officials are participating in the IMF and World Bank Annual Meetings in Marrakech, where they anticipate cementing an agreement with external creditors, eventually leading to the signing of a pact for debt treatment.

Mr. Kojo Oppong Nkrumah, the Information Minister, stated, “We’re optimistic that our bilateral creditors will deliver the MoU in time in November for the Board as we continue our engagement, which has continued to be positive,”

This development comes after Ghana reached a Staff-Level Agreement with the IMF for the first review of its $3 billion Extended Credit Facility (ECF) to secure a second tranche of $600 million, pending approval by the Fund’s Board.

Ghana faced severe economic challenges due to the impact of the COVID-19 pandemic, tightening global financial conditions, and the Russia-Ukraine war. Additionally, pre-existing fiscal and debt vulnerabilities compelled the government to seek an IMF loan-support program in 2022.

Nevertheless, under the implementation of the IMF’s loan-support program, the country has shown strong signs of macroeconomic recovery and stability. Ghana’s Gross Domestic Product growth has averaged 3.2 percent during the last two quarters of 2023, an increase of 0.2 percent compared to the same period in 2022.

During this time, headline inflation has dropped to 38.1 percent as of September, compared to 40.1 percent in August, 43.1 percent in July, and 42.5 percent in June. Additionally, the Ghanaian cedi depreciated cumulatively by 23.5 percent year-to-date, compared to the same period in 2022.

Source : GNA

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