Ghana expects debt agreement with bilateral creditors in May – Finance Minister

April 22, 2024
Ghana expects debt agreement with bilateral creditors in May – Finance Minister

Dr. , the Finance Minister of Ghana, has announced that the country is set to sign a Memorandum of Understanding (MoU) with its official bilateral creditors in May 2024. This MoU is a pivotal step towards restructuring Ghana's external debt of approximately US$13 billion to align with the 's () debt sustainability parameters. Ghana reached an agreement in principle with official creditors in January 2024, and the upcoming MoU signing is expected to facilitate the next phase of the process.

Dr. Amin Adam emphasized that Ghana has already agreed to the terms proposed by official creditors, pending the finalization of the MoU draft expected in May. He expressed confidence that the signing of the MoU would not encounter significant hurdles, as the groundwork has been laid during previous negotiations.

The successful signing of the MoU is anticipated to enhance Ghana's prospects of accessing the third tranche of US$360 million under the IMF's second review programme. The IMF Executive Board is scheduled to convene in June 2024 to deliberate on Ghana's progress.

These developments were highlighted by Dr. Amin Adam during a press briefing to conclude Ghana's participation in the 2024 International Monetary Fund (IMF)/ Group (WBG) Spring Meetings in Washington, US. The briefing, held on Sunday, April 21, was monitored by the Ghana News Agency.

While the IMF staff mission team had previously indicated the importance of the MoU for fund disbursement, Mr. Abebe Aemro Selassie, Director of the African Department at the IMF, clarified that the signing of the MoU would not be a prerequisite for disbursing funds to Ghana.

Dr. Amin Adam further revealed that the Official Creditors Committee had circulated a draft of the MoU among its members, and Ghana awaited its receipt for review and finalization. He expressed optimism about Ghana's ability to secure the third tranche of funding in June, citing the country's commitment to meeting program requirements.

Ghana is currently implementing a three-year Extended Credit Facility (ECF) programme with the IMF, alongside a homegrown Post- Programme for Economic Growth (PC-PEG). These initiatives aim to restore macroeconomic stability, ensure debt sustainability, build resilience, and foster inclusive growth.

Moreover, Ghana's participation in the spring meetings provided a platform for engagement with creditors and development partners to strengthen the country's economic stability and resilience efforts. Notably, one significant outcome of the meetings was the announcement of the procurement of one million modern meters through the World Bank's Programme-for-Results initiative. This initiative aims to enhance revenue collection and address liquidity challenges in the energy sector, particularly amid current power outages in the country.

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