Kristalina Georgieva, Managing Director, International Monetary Fund (IMF), says she is happy to know that the Government of Ghana is making progress on bringing the Staff-Level Agreement (SLA) to the IMF Executive Board for approval.
“Very pleased to hear authorities are making progress on bringing the staff-level agreement to the IMF Executive Board,” she said in a Tweet on Tuesday, adding that the Fund would support Ghana’s efforts to stabilise the economy and promote an inclusive recovery.
Madam Georgieva said this after a meeting with the President, Nana Addo Dankwa Akufo-Addo, at the ongoing 2023 Munich Security Conference in Germany.
Ghana and IMF in December 2022, reached an SLA on the reforms to be supported under a three-year Extended Credit Facility (ECF) of about US$3 billion, pending the Fund’s Executive Board approval for implementation.
The three-year programme is aimed at restoring investor confidence and achieving fiscal and debt sustainability, building buffers to strengthen resilience to economic shocks, and further enhancing the Government’s economic recovery and transformation efforts.
The Executive Board approval is subject to creditor’s assurance of debt sustainability in addition to fiscal consolidation efforts and other structural reforms.
Last Friday, the Government completed its Domestic Debt Exchange Programme (DDEP) and secured GHS 83 billion out of a total of GHS137 billion from its institutional and individual bondholders.
The Government has also suspended all debt service payments for certain categories of external debt, pending an orderly restructuring to support the debt treatment process.
Mr Ken Ofori-Atta, the Finance Minister, on Thursday, informed Members of Parliament (MPs) that Ghana had officially asked its bilateral creditors for a debt treatment initiative under the G-20 Common framework.
“We reiterated the request for expedited treatment under the Common Framework and presented our economic and fiscal outlook as well as the steps undertaken so far with the DDEP,” he said.
The Minister said he was hopeful that commercial creditors would understand the desire to negotiate with its bilateral creditors on softer terms than the ones the Government expects proposing to them.
He noted that a speedy process with the bilateral creditors was needed to pave a way for the discussions with private creditors, as the Government approached China and India to ensure that the discussions with the Paris Club were accelerated.
He said the debt operations formed part of a broader Government response strategy to address the current economic challenges and were complementing such efforts by enhancing domestic mobilisation.
Mr Ofori-Atta said: “All these efforts would be greatly enhanced if the Income Tax (Amendment) Bill, Excise Duty and Excise Tax Stamp (Amendment) Bills as well as the Growth and Sustainability Levy Bill, which are outstanding in this august House could be prioritised and passed.”
The COVID-19 pandemic, Russian and Ukraine War and other domestic challenges worsened economic challenges in Ghana – which the IMF in 2019, described as the fastest growing economy in Africa.
As a result, the country experienced rising debt (Ghana’s public debt was 103 per cent of Gross Domestic Product in 2022, compared to the debt sustainability limit of 55 per cent) and erosion of buffers, worsening financing conditions, high inflation, and exchange rate and balance of payment pressures.
The Government is expecting to receive an Executive Board approval from the IMF by the end of March 2023, to implement programmes as policies, aimed at addressing these challenges and bringing relief to its citizens.