The government and its advisors in the coming weeks will begin extensive discussions with the country’s commercial creditors in line with its debt restructuring strategy to ensure debt sustainability, the Finance Minister, Dr Mohammed Amin Adam, has stated.
The engagement with the commercial creditors, including bond holders, he said were expected to ensure that Ghana achieved the targets set under the International Monetary Fund (IMF)/World Bank Debt Sustainability Framework.
On December 13, 2022, Ghana formally requested for debt treatment under the G20 Common Framework for Debt Treatment beyond the Debt Service Suspension Initiative for a portfolio size of $5.1 billion.
This was after the country approached the IMF for a $3-billion three-year support to implement its Post Covid-19 Programme for Economic Growth to restore macroeconomic stability and growth of the economy.
Dr Adam who disclosed this in Accra yesterday during his maiden 2024 monthly press briefing on the economy, said the government had received counter proposals on the debt treatment scenarios from the bond holder groups on debt treatment.
The government on January 12, 2024 reached an agreement with its Official Creditors under the G20 Common Framework, a comprehensive Debt Treatment beyond the Debt Service Suspension Initiative, after completing the first phase with the bilateral creditors.
The Finance Minister explained that the terms of the agreed debt treatment were expected to be formalised in a Memorandum of Understanding between Ghana and its official creditors, which would then be implemented through bilateral agreements with each member of the Official Creditor Committee (OCC).
“The OCC agreement constitute an additional step towards restoring Ghana’s long-term debt sustainability in line with the IMF programme targets,” Dr Adam stated.
The Finance Minister said Ghana was making progress in the implementation of the three-year balance of payment support programme with the IMF.
According to him, the IMF-supported programme was beginning to yield positive results with growth proving to be more resilient and robust than initially programmed.
The latest Gross Domestic Product (GDP) release by the Ghana Statistical Service indicates that provisionally the overall GDP for 2023 grew by 2.9 per cent compared to the original 2023 budget target of 1.5 per cent and the revised Mid-Year Review Budget target of 2.3 per cent.
Mr Adam said inflation was declining and exchange rate had largely stabilised, stressing that headline inflation which peaked at 54.1 per cent in December 2022, had assumed a downward trend and eased to 23.2 per cent in February 2024.
On the external position, the Finance Minister said the country’s Gross International Reserves was improving and the rate of accumulation of public debt was declining following the progress made in the debt restructuring programme.
“We continue to make progress in the external sector with improvements in both the current account balance and the trade balance. The current account recorded a surplus of $0.46 billion at the end of 2023 compared to a deficit of $1.52 billion at the end of December 2022. Likewise, the trade balance ended 2023 at a surplus of $2.6 billion compared to a surplus of $2.9 billion at the end of 2022. The surplus trend continued in 2024 with a trade surplus of $392 million at the end of February 2024,” Mr Adam stated.
The Finance Minister said IMF review mission in April would begin the second review of Ghana’s IMF programme which would trigger the release of the third tranche of $360 million, bringing the total disbursements for far under the programme to $1.56 billion.
“The Ministry of Finance (MoF) is working with the BoG in preparation for the IMF 2nd Review Mission. Preliminary assessment undertaken by MoF and the Bank of Ghana shows that we are on course to meeting most of the targets under the programme,” he stated.
On supporting the growth of businesses, Mr Adam said a comprehensive Small and Medium-sized Enterprises (SMEs) financing strategy was being developed and would be placed before the Cabinet for approval, saying “once approved, you will see a roll-out of various products to support SMEs.”
BY KINGSLEY ASARE
