IMF Commends Ghana’s Agreement with Official Creditors on Debt Restructuring

The International Monetary Fund (IMF) has expressed satisfaction with Ghana’s recent accord with its Official Creditors, marking a significant step forward in the nation’s debt restructuring efforts.

This development opens the door for the IMF to assess Ghana’s extended debt facility, with the aim of disbursing the subsequent installment of the $3 billion facility.

In response to the announcement by Ghana’s Finance Ministry, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund, remarked, “I welcome Minister of Finance Ofori-Atta’s announcement that the Ghanaian authorities have reached an agreement in principle with their official creditors on a debt treatment, consistent with the objectives of the IMF-supported program.”

The program’s goals include restoring macroeconomic stability, ensuring debt sustainability, enhancing resilience, and laying the groundwork for robust and inclusive growth.

Ms. Georgieva expressed gratitude to the Official Creditor Committee, particularly co-chairs China and France, for their efforts in reaching this agreement. She noted that this achievement is a substantial milestone under the G20 Common Framework, where G20 creditors collaborated to provide debt relief for Ghana.

The agreement sets the stage for the IMF Executive Board to consider the first review of Ghana’s three-year Extended Credit Facility Arrangement in the coming days. Ms. Georgieva looks forward to continued collaboration with Ghana.

Ghana, having secured the first tranche of the IMF bailout in 2023, recently announced an agreement with its Official Creditors to restore debt sustainability, a crucial step in obtaining the second tranche. The government initiated a Domestic Debt Exchange Programme (DDEP) in 2023 to address long-term debt sustainability.

In a statement dated January 12, 2024, the Ministry of Finance emphasized that the agreement, conducted under the G20 Common Framework, signifies a comprehensive debt treatment beyond the Debt Service Suspension Initiative. The government believes that this debt treatment, providing significant flow relief during the program period, will enable the allocation of additional financial resources for critical public investments.

The statement expressed the government’s appreciation for the cooperation of its Official Creditors, highlighting their mutual commitment to restoring debt sustainability in alignment with the International Monetary Fund (IMF) program targets. The government is optimistic that the agreed-upon debt treatment will contribute to the allocation of resources for essential public investments.