The International Monetary Fund (IMF) is optimistic Ghana’s external creditors, particularly the Paris Club will soon reach an agreement with the country on restructuring the country’s external debt.
This will pave the way for the Fund’s Board approval of a programme for Ghana with the anticipated timeline of May 2023. The approval will enable the country to secure a $3 billion Extended Credit Facility (ECF) to boost its Balance of Payment.
Responding to a question at a Press Conference, Julie Kozack, Director of Communications at the IMF said “Financing assurances from official bi-lateral creditors are necessary for presenting the programme to the Executive Board”.
“We have seen strong progress toward creditors delivering on these financing assurances, and we’re hopeful that they can be delivered very rapidly”, she added.
On December 12, 2022, the IMF reached a Staff Level Agreement with Ghana for a three-year program ECF for about $3 billion.
The country has already successfully concluded a Domestic Debt Exchange Programme, which saw the participation of key stakeholders such as the Ghana Bankers Association, the Ghana Insurers Association and the Chamber of Corporate Trustees.
The IMF loan programme is part of a broader effort to support developing countries as they recover from the Covid-19 pandemic’s impact. It is a testament to the critical role that international organisations play in supporting countries during difficult times, and the need for global cooperation to tackle economic and social challenges.
The Economist Intelligence Unit (EIU) in its 2023 Country Report on Ghana warned that the International Monetary Fund board approval for Ghana will be delayed owing to prolonged external debt-restructuring negotiations, given the involvement of multiple stakeholders in the process.
The UK-based firm said it expects Ghana to secure restructuring agreements on its public external debt during 2023-2024, involving official and private creditors alike.
This will include a combination of write-offs, maturity extensions and reductions in interest rates.