IMF approves $3 billion bailout for Ghana following debt assurances

IMF approves 3 billion bailout for Ghana following debt assurances
President Akufo-Addo and the IMF Boss (Kristalina Georgieva)

Ghana received unanimous approval from the International Monetary Fund (IMF) Executive Board for a $ 3 billion bailout on Wednesday, May 17 following a meeting in Washington.

The West African nation secured the necessary debt assurances from the Paris Club on Friday, May 12.

The Paris Club and China have urged other official bilateral creditors and private creditors to agree to Ghana’s deal as soon as possible after they committed to provide the debt relief required for Ghana to access the $3bn IMF bailout.

A press release from the Paris Club on Friday, May 12 stated “The creditor committee emphasizes that the Ghanaian authorities are expected to seek from all private creditors and other official bilateral creditors debt treatments on terms at least as favorable as those being considered by the creditor committee, in line with the comparability of treatment principle.

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Therefore, it continued “the creditor committee calls on private creditors and other official bilateral creditors to commit without delay to negotiate with Ghana such debt treatments that are essential to ensure the full effectiveness of the debt treatment for Ghana under the Common Framework.”

Also, a creditor committee for Ghana has been established by countries with eligible claims to facilitate the speedy implementation of the resolution. The creditor committee is expected to be co-chaired by China and France.

“The creditor committee reviewed 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.”

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“The creditor committee supports Ghana’s planned IMF upper credit tranche (UCT) program and its quick 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,” the press release added.

The Fund will on Thursday, May 18 give details on Ghana’s disbursements.

In a media advisory on Wednesday, the IMF says a virtual press conference will be held on Thursday in Washington DC “to brief journalists on the outcomes of IMF Executive Board meeting on Ghana’s request for an Extended Credit Facility Arrangement, which will take place on Wednesday, May 17”.

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Minister of Finance Kenneth Nana Yaw Kuntukunuku Ofori-Atta and Central Bank Governor Dr Ernest Kwamina Yedu Addison will join the IMF Mission Chief for Ghana, Stephane Roudet, for the press conference.

Senior Communications Officer for IMF Tatiana Mossot will coordinate the press conference.

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