Finance Minister, Ken Ofori-Atta, has revealed that Ghana has been able to secure the necessary assurances from China and France in securing a Memorandum of Outstanding (MoU) for the restructuring of Ghana’s external bilateral debts.  

“We have met the Central Bank Governor of China and we don’t perceive any opposition or reluctance in participating positively when it comes to the Memorandum of Understanding in restructuring of our external bilateral debts” the Finance Minister said.

Mr Ofori-Atta revealed that “The Chinese government within the past months is close to reaching a similar deal with Zambia, Sri Lanka and Suriname. So following that trend, we expect some similar cooperation from them when it comes to Ghana”.

Answering questions from Journalists on the sidelines of the Annual International Monetary Fund/ World Bank meetings in Marrakesh, Morocco, the Finance Minister said Ghana’s engagement under the G20 Common Framework has shown that it is working for countries with debt challenges and there are indeed mechanisms to restructure their debts.  

“We have made tremendous progress under this framework compared to other countries on a similar path,” the Minister said.

Ghana’s IMF Programme and Securing Financing Assurance  

Ghana, last week, reached a staff-level agreement in relation to the review of the first programme with the IMF.

This should pave the way for the IMF staff to forward Ghana’s report after the review to the board for approval and disbursement of the second tranche of $600 million.

However, the country is first expected to secure a Memorandum of Understanding from the External Bilateral Creditors, a move needed to help the IMF Board approve the second tranche of funds when it meets in the third week of November 2023.

Answering questions from Journalists in Marrakesh, Morocco on the sidelines of the Annual IMF/World Bank meetings, the Finance Minister noted that Ghana will meet the deadline based on the engagements with the bilateral partners over the past weeks.

The Finance Minister was hopeful that the expected stability for the economy will be achieved very soon, based on programmes that government is implementing and its firm commitment to be prudent with expenditure going forward.

Joy Business is learning that the World Bank will come on board with some $300 million to support the Ghana Financial Stability Fund, that is if Ghana is able to pass the first review of the IMF programme. The Afreximbank will also come on board with some financial support, as well as some of the country's donor partners.

Ghana’s External Debt

China and France are currently the Co-Chairs of the Official Creditor Committee that was formally established on May 12, 2023, under the common framework for debt treatment.

Ghana’s bilateral lenders earlier this year formed what could be described as an official creditor committee to negotiate restructuring of the country’s debts.

Government is looking at restructuring about $13 billion in debt to these bilateral creditors.

China is said to be the biggest holder of external debt with about $1.7 billion .

Finance Minister projects more than 2.5% growth rate for Ghana

The Finance Minister also disclosed that government has targeted a growth rate of more than 2.5% by December 2023.

“The IMF expected Ghana to do averagely about 1.2%, but has already indicated it will review that projection going forward. We believe that we are going to do better when it comes to the expansion of the economy", the Minister of Finance revealed.  

He added “We are committed to instituting programmes that will help sustain the numbers that we are witnessing when it comes to growth.”

On the rising Treasury Bills Rate, the Finance Minister noted “It is a real concern, but everything is being done to lower the rates.”

“Treasury Bills is always a battle between inflation and growth and I believe that the Bank of Ghana is taking measures to help deal with the challenge,” the Finance Minister added.

Tax Exemptions and Concerns by IMF

In a recent report, the IMF expressed concerns about the tax reliefs that the Ghanaian government is giving to businesses and investors, as well as the potential effects on the country's economy and ability to raise revenue.

But responding to these concerns, the Minister of Finance said the bill to review these exemptions is currently before parliament for consideration and the government is fully committed to ensuring that these exemptions are granted to businesses that actually need them.

“Measures are also been taken to ensure that in taking these measures it doesn’t impact negatively on the economy and Foreign Direct Investments,” the Minister of Finance added.

Restructuring of Energy Sector debts

The Minister of Finance also disclosed that the government has made significant progress with respect to the energy sector debt as well as some reforms that Ghana needed to undertake as part of the IMF programme.

 The Minister noted that “We are happy that IMF has also accepted our energy recovery programme as well.”