IMF deal: Chinese delegation in Ghana as government restructures external debts

President Akufo-Addo said the Chinese Government has sent a delegation from China’s Eximbank to Accra, over the weekend, to meet with officials of the Ministry of Finance to discuss the possibility of restructuring the country’s debt.

According to the International Institute of Finance, Ghana owes about $13 billion in Eurobonds and $4 billion to bilateral loans as of September 2022, of which $1.7 billion is owed to China alone.

President Akufo-Addo three weeks ago appealed to Germany to convince China to participate in the Credits Committee under the Paris Club Common Framework to deal with Ghana’s external debt restructuring efforts.

The German government has expressed its willingness to assist Ghana to deal with its difficult economic challenges, amidst the country’s unsustainable debt levels which have necessitated the debt restructuring efforts.

Addressing an annual event which allows various foreign diplomats to exchange greetings, interact with each other and strengthen existing bonds of friendship, cooperation, and goodwill between Ghana and their respective countries and organisations, President Akufo-Addo said Like the rest of the world Ghana acknowledges that its economy is in considerable difficulty.

The Budget drawn for the 2022 fiscal year, according to the President, was thrown out of gear, disrupting the balance of payments and debt sustainability and further exposing the structural weaknesses in the Ghanaian economy.

Ghana has gone to the IMF, to repair in the short term, its public finances and restore the balance of payments, while the government continue to work on the medium to long-term structural changes that are at the heart of the country’s goal of constructing a resilient and robust Ghanaian economy and building a Ghana beyond Aid.

President Akufo-Addo said just as the government managed to achieve a Staff Level Agreement with the Fund in record time, in December last year and as part of fulfilling the difficult but highly successful Domestic Debt Exchange Programme, he was convinced the government conclude $3 billion stimulus package with the IMF.

That, he said, would set the stage for the strong recovery of Ghana’s economy.

The President indicated, that the government would hoped that all of Ghana’s friends would weigh in with words of support to the Fund to make this agreement possible and on time.

He said as part of efforts to reset the economy and restore stability; the government has also come up with a seven-point agenda aimed at restoring macroeconomic stability and accelerating economic transformation that is articulated in the post-COVID-19 program for economic growth.

The programme, President Akufo-Addo indicated, contains a set of goals which seek to mobilise domestic revenue; streamline and rationalise expenditure; boost local productive capacity; promote and diversify exports; protect the poor and vulnerable; expand digital and climate-responsible infrastructure; implement structural public sector reforms.

He said the government acknowledges that there would be palpable reactions to the fiscal adjustments it intends to implement in the coming years for the sustainability, recovery and eventual transformation of the economy but assured that as it had shown in other circumstances, “we shall turn this crisis into an opportunity to restore not just the short-term problems, but the long-term structural problems.”

He said the debilitating effects of COVID-19 have more than ever heightened the high interconnectivity of the world and as a result, used the opportunity to reiterate Ghana’s appreciation for the solidarity shown to the country by the diplomats’ respective countries and governments.

He also expressed Ghana’s gratitude to countries such as Denmark, Egypt, France, Germany, Italy, India, Japan, Malaysia, Morocco, Netherlands, Norway, China, Russia, Serbia, Singapore, South Korea, Spain, Turkey, US, Uk,…through scholarship and training programmes such as governance, arts and culture, medicine, security agriculture, technology, health, trade…among others.

The support from these countries through vaccines and PPEs and various forms of collaboration during the pandemic the President noted are highly appreciated.

The President said Ghana would remain mindful of its responsibility to contribute to the economic and political integration of her region and the continent as a whole.

The potential for African countries to succeed together he stressed lies largely in intra-African trade.