The Paris Club yesterday agreed to establish the Official Creditor Committee (OCC) under the G20 Common Framework for Debt Treatments, to seek financing assurances from bilateral creditors.
“The Paris Club has today established the OCC, co-chaired by China and France with the granting of Financing Assurances, Ghana is now ready to go to the IMF Board,” Finance Minister, Ken Ofori-Atta, announced on his Twitter Page yesterday.
He thanked all the country’s bilateral partners for helping “Ghana reach this significant milestone.”
A joint statement issued yesterday, said “the creditor committee examined the macroeconomic and financial situation of Ghana, including its long-term debt sustainability, and its formal request for a debt treatment under the “Common Framework for Debt Treatments beyond the DSSI” endorsed under the Saudi G20 Presidency in November 2020, which was also endorsed by the Paris Club,” the statement said.
It said the creditor committee supported Ghana’s envisaged IMF upper credit tranche (UCT) programme and its swift adoption by the IMF Executive Board to address Ghana’s urgent financing needs.
The statement said the creditor committee encouraged Multilateral Development Banks (MDBs) to maximise their support for Ghana to meet its long-term financial needs.
“Consistent with their national laws and internal procedures, creditor committee members are committed to negotiate with the Republic of Ghana terms of a restructuring of their claims to be finalised in a Memorandum of Understanding (MoU), in accordance with the “Common Framework for Debt Treatments beyond the DSSI,” the statement said.
It said the creditor committee urged private creditors and other official bilateral creditors to commit without delay to negotiate with Ghana such debt treatments that are crucial to ensure the full effectiveness of the debt treatment for Ghana under the Common Framework.
The Managing Director of the International Monetary Fund (IMF), Ms Kristalina Georgieva, in a statement yesterday in reaction to the statement from the OCC posted on the IMF website, said “I welcome the statement from the Official Creditor Committee for Ghana on the importance of an IMF-supported economic program, together with its commitment to negotiate debt restructuring terms accordingly.”
She said “this statement provides the necessary financing assurances for the IMF Executive Board to consider the proposed Fund-supported programme and unlock much needed financing from Ghana’s development partners. I also strongly endorse the call by the Official Creditor Committee for private creditors and other official bilateral creditors to commit to comparable debt treatments.”
“The Creditor Committee’s action recognises the Ghanaian authorities’ strong reform programme, which aims to restore macroeconomic stability and debt sustainability while laying the foundation for an inclusive recovery,” Ms Georgieva stated.
Ghana signed on for IMF programme in the middle of last year for balance of payment support to restore macroeconomic stability.
Ghana reached a staff-level agreement with the IMF on December 12, 2022 to enable the country seek the approval of the IMF Board for the programme.
The IMF Board consideration of Ghana’s programme request has been pending because the country has not received financing assurances from Ghana’s official bilateral creditors.
BY KINGSLEY ASARE