Tuesday, July 9, 2024
HomeBUSINESSIMF hopeful Ghana will soon reach a debt deal with bilateral creditors

IMF hopeful Ghana will soon reach a debt deal with bilateral creditors

The Director of the African Department at the International Monetary Fund (IMF), Abebe Selassie, has said that the Fund hopes that Ghana will soon meet its bilateral creditors and agree on restructuring international bonds.

The agreement, when reached, will play a major milestone in getting the Board of the Fund to disburse the third tranche, he said.

He indicated that the staff-level agreement that has been reached is by far the most important component in the second review of the programme with the fund.

Answering questions at a session at the World Bank, IMF Spring Meetings in Washington on Thursday, April 18, “As of now there is no MOU with bilateral creditors but we know that there have been intense discussions in recent weeks, those are continuing and we are very hopeful that they will be able to meet the bilateral official creditors. To be clear, they have provided financial assurances.

“As we noted we have reached a staff-level agreement and that is by far the most important component  for the review.”

Abebe Selassie also noted that Ghana had done its part in the move to get the Fund to release the third tranche.

It is now left with the external creditors to fulfill their part to get the board to approve the disbursement, he said.

He said “Whereas it took nine months or more for Zambia to get the official creditor committee to be created, in Ghana’s case it was very rapid and that is what allowed us to go to the board and get the programme approved.

“We are very hopeful that ongoing discussions among official creditors will also expeditiously allow us to conclude the upcoming review. Again the most recent mission reached an agreement with the government on policies that are needed to tackle the most recent issues and also put in place an important budget for next year.

“So Ghana has done its fair share and it is for creditors to take steps on this, we are not going to ask the government to do more adjustments because creditors haven’t asked either. So we will provide all the information necessary so creditors can move, allowing us to go to the board as soon as possible.”

The Finance Ministery had announced that the government had reached an interim agreement with international Bondholders.

To that end, the Ministry said the government would continue its negotiations until they reach a deal that is consistent with  IMF debt sustainability targets.

“Update on External Debt Operations: Ghana and Bondholders reached an interim deal, which must still be tweaked to meet IMF debt sustainability targets. We will therefore regroup to continue negotiations until we reach a deal that is consistent with IMF debt sustainability targets,” he wrote on X.

The Ministry announced earlier on Monday, April 15 that Ghana was unable to secure a workable debt deal with two bondholder groups in its push to restructure $13 billion of international bonds.

Reuters reported that formal talks were on hold for now after the International Monetary Fund indicated that the deal would not fit its debt sustainability parameters.

The  IMF Mission Chief for Ghana, Mr. Stéphane Roudet, had said that they were awaiting Ghana to reach an agreement with external creditors to enable the Board to review the staff-level agreement that has been reached as part of the process to release the third tranche.

The  IMF staff and the Ghanaian authorities had reached a staff-level agreement on the second review of Ghana’s economic program under the Extended Credit Facility arrangement.

This staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received.

Mr Roudet said at a joint IMF, Ministry of Finance, Bank of Ghana press conference in Accra on Saturday, April 13 that an agreement between the Ghanaian authorities and their official creditors on an MoU for a debt treatment in line with programme parameters, would provide the needed financing assurances.

Upon completion of the Executive Board review, he said, Ghana would have access to US$ 360 million, bringing the total  IMF financial support disbursed under the arrangement since May 2023 to US$ 1,560 million.

“Performance under the IMF-supported program has been generally strong, with most quantitative targets met. Good progress has also been made on the key structural reform milestones. The authorities’ policies and reforms to restore macroeconomic stability and debt sustainability while laying the foundations for stronger and more inclusive growth are already generating positive results.

“Economic activity in 2023 was more robust than initially envisaged, and growth projections for 2024 will be revised upward. Monetary policy has remained appropriately tight, allowing for inflation to decline rapidly.

“On the fiscal front, consistent with the authorities’ commitments under the IMF-supported program, the fiscal primary balance on a commitment basis improved by over 4 percentage points of GDP in 2023 and is on track to achieve a fiscal primary surplus of ½ percent of GDP in 2024. Spending has remained within budget limits, while the authorities have significantly expanded social protection programs to help mitigate the impact of the crisis on the most vulnerable. Ghana has met its non-oil revenue mobilization target, while making progress in implementing ambitious structural fiscal reforms to bolster domestic revenues, strengthen public financial and debt management, and enhance transparency,” a statement issued by the Fund after the press conference said.


Explore all the juicy news & education you desire with VOICE OF UCC on WhatsApp!

Click on the button below to join the VOICE OF UCC channel for curated, meaningful latest music and stories tailored just for YOU!

Voice of UCC
Voice of UCChttps://www.voiceofucc.com
Voice of UCC is your reliable source for news, entertainment and educational excellence information. Our goal is to provide you with the latest breaking news and videos straight from the entertainment industry.


Please enter your comment!
Please enter your name here

Most Popular

Recent Comments