IMF welcomes Ghana’s agreement with Official Creditors for debt sustainability

The International Monetary Fund (IMF) has expressed its approval of Ghana's recent agreement with its Official Creditors, marking a pivotal step towards the review of Ghana's extended debt facility.

This agreement is crucial for the disbursement of the next tranche of the $3 billion facility.

In response to the announcement by Ghana's Finance Ministry, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund, stated, “I welcome Minister of Finance Ofori-Atta's announcement that the Ghanaian authorities have reached an agreement in principle with their official creditors on a debt treatment, consistent with the objectives of the IMF-supported program, which aims to restore macroeconomic stability and debt sustainability, build resilience, and lay the foundations for stronger and more inclusive growth.”

She extended her appreciation to the Official Creditor Committee, with special acknowledgment to the co-chairs, China and France, for their collaborative efforts in reaching this agreement.

Georgieva highlighted the significance of this agreement within the G20 Common Framework, where G20 creditors united to provide debt relief for Ghana.

“This agreement clears the path for IMF Executive Board consideration of the first review of Ghana's three-year Extended Credit Facility Arrangement in the next few days. I look forward to continuing our fruitful collaboration with Ghana,” added Ms. Kristalina Georgieva.

Ghana's Ministry of Finance, in a statement on January 12, 2024, disclosed that the agreement falls under the G20 Common Framework, specifically ‘on a Comprehensive Debt Treatment Beyond the Debt Service Suspension Initiative.'

The Ghanaian government, aiming to secure the second tranche of the IMF bailout, initiated the Domestic Debt Exchange Programme (DDEP) in 2023 to restore the country's long-term debt sustainability.

Expressing confidence in the debt treatment's positive impact, the Ministry of Finance stated, “The Government of Ghana commends the support and cooperation of its Official Creditors in reaching this agreement, which demonstrates a mutual commitment to restoring debt sustainability in line with the International Monetary Fund (IMF) program targets.

The Government is confident that this debt treatment, which entails significant flow relief during the program period, will allow for the allocation of additional financial resources towards critical public investments.”