Prime News Ghana

Ghana expects debt agreement with bilateral creditors in May – Finance Minister

By Primenewsghana
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Finance Minister Dr Mohammed Amin Adam says Ghana will in May 2024 sign a Memorandum of Understanding (MoU) with its official bilateral creditors as a draft of the agreement is soon to be shared with the country.

This MoU is in relation to the restructuring of some US$13 billion external debt to meet IMF’s debt sustainability parameters, with the country reaching an agreement in principle with official creditors in January 2024.

“Essentially, we’ve agreed to all that we need to do for the [second review programme] to go to the Board, with the only outstanding issue being the draft of the MoU from official creditors, expected in May 2024,” Dr Amin Adam said.

“If we have that [the draft MoU], there won’t be any lengthy negotiation because we’ve already agreed to the offer they gave to us in principle since January. So, we don’t expect any hurdles to cross as far as that’s concerned,” he added.

This is expected to further boost the country’s chance to access a third tranche of US$360 million when the IMF Executive Board meets in June this year over Ghana’s second review programme.

The Minister said this at a press briefing to wrap up Ghana’s activities for the 2024 International Monetary Fund (IMF)/World Bank Group (WBG) Spring Meetings in Washington, US.

The briefing, held on Sunday, April 21, was monitored by the Ghana News Agency.

When it reached a staff-level agreement with Ghana last week, the IMF staff mission team stated that the next step was for the country to have an MoU with the official bilateral creditors.

However, at the just ended Spring Meetings, Mr Abebe Aemro Selassie, Director, African Department, IMF, clarified that the signing of the MoU would not be a prerequisite for the disbursement of funds to Ghana.

On this development, Dr Amin Adam noted that the Official Creditors Committee had shared a draft of the MoU with their members regarding the country’s external debt restructuring.

The Minister added that, “… they’re about sharing it [the draft MoU] with us. As soon as we get the draft and we’re fine with it, that we will mean that we have an agreement on the MoU.”

He expressed confidence about Ghana securing the third tranche of US$360 million in June.

“We do not have any reason to suggest that the Board well miss this because essentially, we’ve agreed to all that we need to do… so, I can tell you, we’re very optimistic.”

Ghana is implementing a three-year Extended Credit Facility (ECF) programme with the IMF, supported by a homegrown Post-COVID-19 Programme for Economic Growth (PC-PEG).

This programme is aimed at restoring macroeconomic stability and debt sustainability, build resilience, and lay the foundation for stronger and more inclusive growth.

The spring meetings, served as a platform for the government to engage with creditors, and other development partners in respect to the country’s economic stability and resilience endeavour.

One of the major developments during Ghana’s participation of the 2024 spring meetings was the announcement of the procurement of some one million modern meters into the country.

The meters would be procured through the World Bank’s Programme-for-Results initiative to help improve revenue collection amidst current power outages in the country, largely attributed to liquidity challenges in the energy sector.