IMF approval sets tone for accelerated recovery - President Akufo-Addo
President Akufo-Addo interacting with a delegation from Catholic Bishops’ Conference after a meeting at the Jubilee House.

IMF approval sets tone for accelerated recovery - President Akufo-Addo

President Nana Addo Dankwa Akufo-Addo has said the “good news” that the International Monitory Fund (IMF) board is set to approve Ghana’s programme positions the country for accelerated economic and move towards the path of development.

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“The sacrifices that the country had to make since last year, the difficulties… it may be that at long last, we are going to see the recovery because, with the approval of the IMF, we are then in a strong position to do other arrangements that will help our economy get back into a strong place,” he added.

President Akufo-Addo stated this when the Catholic Bishops Conference paid a courtesy call on him at the Jubilee House in Accra Friday (May 12, 2023).

The IMF is set to approve Ghana's US$3billion programme by May 19, 2023, after the country received financial assurances from its external creditors.

President Akufo-Addo told the Bishops that “today is a special day in the recent history of Ghana. At long last, after our various issues with the IMF, today, we are informed that the last hurdle towards our agreement with the fund has been overcome”.

He explained that the Paris Club met today and formed the credit committee, co-chaired by China, and had okayed and approved Ghana’s request, adding that “and, in fact, put very strong word behind the approval. So it is fortuitous that you [Bishops] should be here on such a date”.

He described the announcement as “good news”, which meant that hopefully, next Wednesday, the board itself would meet and give a final agreement to Ghana’s demand.

Related: IMF set to approve Ghana's $3bn bailout by May 19

Committee

In a statement issued and signed by IMF, Ms Kristalina Georgieva said following a statement today in reaction to the statement from the Creditor Committee for Ghana under the G20 Common Framework for Debt Treatments, the Creditor Committee of the IMF, which is co-chaired by China and France in a release dated May 12, said it had examined the macroeconomic and financial situation of Ghana, including its long-term debt sustainability, and its formal request for a debt treatment under the “Common Framework for Debt Treatments beyond the DSSI” endorsed under the Saudi G20 Presidency in November 2020, which was also endorsed by the Paris Club.

It added that the creditor committee supported Ghana’s envisaged IMF upper credit tranche (UCT) programme 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 maximise their support for Ghana to meet its long-term financial needs,” the release stated.

It said consistent with their national laws and internal procedures, creditor committee members were committed to negotiating with Ghana’s terms of restructuring their claims to be finalised in a Memorandum of Understanding (MoU), in accordance with the “Common Framework for Debt Treatments beyond the DSSI.

Private creditors

The statement said the creditor committee stressed that the Ghanaian authorities were expected to seek from all private creditors and other official bilateral creditors debt treatments on terms at least as favourable as those being considered by the creditor committee, in line with the comparability of treatment principle.

It added that consequently, the creditor committee urged private creditors and other official bilateral creditors to commit without delay to negotiate with Ghana such debt treatments that were crucial to ensure the full effectiveness of the debt treatment for Ghana under the Common Framework.

MD

The IMF Managing Director, Kristalina Georgieva, also, in a statement, welcomed the announcement from the Creditor Committee for Ghana on the importance of an IMF-supported economic programme, together with its commitment to negotiate debt restructuring terms accordingly. 

She said the statement from the committee provides the necessary financing assurances for the IMF Executive Board to consider the proposed Fund-supported programme 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. 

“The Creditor Committee’s action recognises the Ghanaian authorities’ strong reform programme, which aims to restore macroeconomic stability and debt sustainability while laying the foundation for an inclusive recovery,” she added.

She added that this also signals that further progress was being made under the G20 Common Framework, demonstrating that international partners were ready to work together to help countries resolve their debt issues, adding that “this is vital to enable countries such as Ghana to achieve sustainable growth and poverty reduction”.

On December 12, 2022, the IMF reached a staff-level agreement with the Ghanaian authorities on a new arrangement under the Extended Credit Facility.

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Board consideration of Ghana’s programme request has been pending financing assurances from Ghana’s official bilateral creditors.

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