IMF Board To Approve Ghana’s US$600m On January 19

The executive board of the International Monetary Fund (IMF) is expected to approve the second tranche of its US$3 billion credit facility to Ghana on 19 January 2023.

This follows Ghana’s ability to secure a debt treatment from its official creditors, which has led to the restructuring of US$2.5 billion out of a total exposure of US$5.1 billion owned bilateral and commercial creditors.

The Official Creditor Committee (OCC), co-chaired by China and France, presented a draft term sheet to the government of Ghana and the International Monetary Fund on 12 January 2024.

This will lead to a memorandum of understanding and then clearance to the management of IMF to go to their board to seek approval to release the second tranche of 600 million dollars to Ghana.

Speaking to Asaase Radio’s Nana Oye Ankrah in an exclusive interview, Finance Minister Ken Ofori expressed optimism that the board’s decision will be positive due to the country’s level of discipline.

“Yesterday was quite historic. We did receive the draft term sheet from the OCC which means in effect that the co-chairs, France and China, working with members of the Official Creditor Committee, had come to a broad agreement on the way forward. That really signalled to the Fund that they can proceed to have the board meeting, which will lead to the release of the US$600 million, which we negotiated with Fund.”

Asked about the terms presented by the OCC on the debt restructuring, the minister did not give much details except to say that it was favourable.

“For the terms, we would finally have to sit with the OCC to agree on a memorandum of understanding. But we have already sent them a notification that we are in broad agreement with the terms that they have sent to us,” Ofori-Atta stated.

Ghana’s cutoff date for the restructuring of the US$2.5 billion has also been extended from March 2022 to December 2022, which gives the country more financial freedom.

The country’s attempt to get a deal from Paris Club members and bilateral creditors has dragged on for months. The delay, according to analysts, was largely due to the low level of cooperation from China and France, who presented new conditions.

But Ofori-Atta explained that “conditions with regards to getting the assurance that there was comparability of treatment with the various loans that have been given to Ghana. I think that that technical exercise went in someway. ”

The IMF welcomed Ghana’s debt treatment agreement with its external creditors. Managing director, Kristalina Georgieva took to her X handle to express her delight. ” Great news on 🇬🇭 Ghana reaching an agreement with its official bilateral creditors on a debt treatment. This clears the path for our Board to consider Ghana’s first program review and continue providing much-needed support. My statement here.”