Rédaction Africa Links 24 with Ghanaian Times
Published on 2024-03-27 07:14:02
The government, along with its advisors, will be engaging in extensive discussions with the country’s commercial creditors in the near future as part of its debt restructuring strategy to ensure debt sustainability, according to Finance Minister Dr. Mohammed Amin Adam. These discussions with commercial creditors, including bond holders, aim to help Ghana meet the targets set under the International Monetary Fund (IMF)/World Bank Debt Sustainability Framework.
Ghana formally requested debt treatment under the G20 Common Framework on December 13, 2022, for a portfolio size of $5.1 billion. This request came after seeking IMF support for a $3 billion three-year plan to implement the Post Covid-19 Programme for Economic Growth, aimed at restoring macroeconomic stability and promoting economic growth.
During his inaugural 2024 monthly press briefing on the economy in Accra, Dr. Adam revealed that the government had received counter proposals from bond holder groups regarding debt treatment scenarios. An agreement was reached on January 12, 2024, with Ghana’s Official Creditors under the G20 Common Framework for comprehensive debt treatment beyond the Debt Service Suspension Initiative, following completion of the initial phase with bilateral creditors.
The terms of the agreed debt treatment are set to be formalized in a Memorandum of Understanding between Ghana and its official creditors and implemented through bilateral agreements with each member of the Official Creditor Committee (OCC). This agreement signifies a step forward in restoring Ghana’s long-term debt sustainability as per IMF program targets, Dr. Adam noted.
Progress is being made in the execution of the three-year balance of payment support program with the IMF, Dr. Adam stated. Positive results are emerging, with GDP growth proving to be more robust than anticipated. The 2023 GDP grew by 2.9%, surpassing the original budget target of 1.5% and the revised Mid-Year Review Budget target of 2.3%.
Key economic indicators are showing signs of improvement, with inflation on a downward trend and the exchange rate stabilizing. The Gross International Reserves are increasing, and the accumulation rate of public debt is decreasing due to the progress in the debt restructuring program.
The external sector is also showing progress, with improvements in the current and trade balances. The current account recorded a surplus of $0.46 billion at the end of 2023 compared to a deficit in 2022, and the trade balance ended 2023 with a surplus of $2.6 billion. The trade surplus trend continued into 2024, reaching $392 million by February.
The IMF will conduct a review mission in April to begin the second review of Ghana’s IMF program, unlocking the third tranche of $360 million. The Ministry of Finance is collaborating with the Bank of Ghana to prepare for the IMF review. A comprehensive Small and Medium-sized Enterprises (SMEs) financing strategy is also in the works and will be presented to the Cabinet for approval to support the growth of businesses.
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