Debt Cancellation: China, Paris Club playing ball; talks ‘progressing positively’ – Akufo-Addo hopes IMF deal gets sealed this March

The Paris Club and the government of China are cooperating with Ghana on the West African country’s quest to restructure its external debts so as to meet the timeline for securing a board-level agreement with the International Monetary Fund for the $3-billion extended credit facility to bailout the ailing economy, President Nana Akufo-Addo has said.

President Akufo-Addo believes once that hurdle is crossed, the IMF deal would be as good as done within this month.

Addressing the annual ambassadors and high commissioners get-together at the Peduase Lodge on Tuesday night, Mr Akufo-Addo said: “Just as we managed to get the staff-level agreement in record time in December last year, whose terms we’re systematically fulfilling, including the difficult but ultimately highly successful process of the domestic debt exchange programme, I’m confident that with the cooperation that we’re receiving from the Paris Club and the People’s Republic of China, which has sent a delegation from China’s EXIM Bank to Accra over the weekend to meet with officials of the Ministry of Finance, we shall be able to go to the board of the Fund to conclude finally the agreement by the end of March”.

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“This will set the stage for the strong recovery of Ghana’s economy”, he noted.

President Akufo-Addo on Friday, 3 February 2023, urged Germany to “encourage” China, an ad hoc member of the Paris Club, to support Ghana’s debt restructuring efforts.

He said it was critical that the Paris Club swiftly establishes, with the participation of other official creditors, a creditors committee, to support the efforts that would enable Ghana to restore economic growth.

The president made the call when the visiting German Finance Minister, Christian Lindner called on him at the Jubilee House, Accra.

Mr Linden, who was the head of a delegation from his country, held bilateral talks with the President aimed at boosting relations and economic ties between the two nations.

President Akufo-Addo told the minister that the main concern for his government was to conclude negotiations with the International Monetary Fund (IMF), particularly at the Board Level and seal a deal with the Bretton Woods institution by mid-March this year.

“Our main concern right now is the arrangements that we are in the process of concluding with the IMF…and the specific assistance that will be useful to us and help us fast-track the process”.

“Our target is that by the middle of March, we should be before the Board for the full agreement. We have already taken one important step forward in concluding a staff-level agreement with the IMF and we are now looking to go the full haul in concluding the agreement. We are hoping that it will be done by the middle of March”.

“One of the steps towards that has been the domestic debt exchange programme that we are on, which fortunately, we have quite a lot of difficulties, has now been virtually concluded,” he stated.

However, President Akufo-Addo stressed that there was a vital need for other creditors to support the efforts that his government was undertaking to restructure both the external and domestic debts of the country, to enable the IMF deal to fall through quickly.

“We now have our relations with the Paris club and the common framework, and we are looking for as quickly as possible a creditor committee to be established, so we will have the body with whom we can engage to bring those discussions as quickly as possible.

“We have good relations with China. We will like you to encourage China to participate in these programmes as quickly as possible…A very important consideration for us is the financial stability fund that has been promised us as one of the key outcomes of these negotiations and definitely once again, your voice in trying to bring that into being is something that we would appreciate very much,” President Akufo-Addo told Finance Minister Lindner.

The President commended the German government for extending support to Ghana to enable her to overcome the current economic difficulties.

He said the German government had proven to be a reliable ally and Ghana would continue to count on the European nation as “a privileged partner” as the country seeks a bailout from the IMF.

The IMF, in December 2022, reached a Staff-Level Agreement on a $3-billion, three-year Extended Credit Facility with Ghana to relieve its debt distress.

The approval of the package is, however, subject to Ghana comprehensively restructuring its domestic and external debts.

Source: Classfmonline.com