Ghana ready for IMF bailout

Ghana has secured financing assurances from the Paris Club following the establishment of the Official Creditor Committee co-chaired by China and France.

This comes months after Ghana’s bid to get financing assurances from its international lenders to enable it get the necessary bailout support from the International Monetary Fund.

By this, the move will pave the way for the Fund’s Board approval of a programme for Ghana with the expected timeline of May 2023.

The approval will also enable the country to secure a $3 billion Extended Credit Facility (ECF) to boost its Balance of Payment.

A tweet on the official Twitter page of the Finance Ministry on Friday noted that the Paris Club today established the Official Creditor Committee co-chaired by China & France.

“With the granting of Financing Assurances, Ghana is now ready to go to the IMF Board.”

The IMF loan programme is part of a broader effort to support developing countries as they recover from the Covid-19 pandemic’s impact.

“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.”

“Consistent with their national laws and internal procedures, creditor committee members are committed to negotiate with the Republic of Ghana terms of a restructuring of their claims to be finalized in a Memorandum of Understanding (MoU), in accordance with the ‘Common Framework for Debt Treatments beyond the DSSI’,” the Creditor Committee for Ghana said in a joint statement.

Meanwhile, the IMF has welcomed the decision.

“I welcome the statement from the Official Creditor Committee for Ghana on the importance of an IMF-supported economic program, together with its commitment to negotiate debt restructuring terms accordingly. This statement provides the necessary financing assurances for the IMF Executive Board to consider the proposed Fund-supported program and unlock much-needed financing from Ghana’s development partners. I also strongly endorse the call by the Official Creditor Committee for private creditors and other official bilateral creditors to commit to comparable debt treatments,” Ms. Kristalina Georgieva, Managing Director of IMF said on Friday.