Mr. Ajay Banga, President of the World Bank Group (WBG), has recognized Ghana's efforts in managing its debt burden and debt treatment with external creditors.
During a press briefing at the WBG/International Monetary Fund (IMF) Annual Meetings in Marrakech on October 11, 2023, Mr. Banga noted that Ghana had made progress in addressing its debt situation.
However, he urged Ghana to continue working on completing its debt treatment with external creditors and to establish a suitable regulatory framework to ensure macroeconomic stability and a conducive environment for business growth.
Ghana's public debt increased from 79.6 percent of Gross Domestic Product (GDP) in 2021 to over 90 percent in 2022.
Debt service-to-revenue reached 117.6 percent, according to IMF data, prompting the country to seek an Extended Credit Facility (ECF)-supported scheme with the IMF for the implementation of a Post-COVID-19 Programme of Economic Growth (PC-PEG).
Mr. Banga emphasized the negative impact of high debt burdens on development and investment. He encouraged countries like Ghana, undergoing debt restructuring, to expedite the completion of their external debt treatments.
To address these challenges, Mr. Banga called on the Paris Club, non-Paris Club countries, and commercial creditors to engage in country-by-country negotiations on debt treatments.
He stressed the importance of achieving better regulatory and macroeconomic frameworks to prevent similar debt burdens in the future.
In related news, Madam Kristalina Georgieva, Managing Director of the IMF, congratulated Ghana for completing its first Staff-Level Agreement on the review of the Fund's US$3 billion loan-support program.
She expressed optimism that bilateral creditors would soon agree on debt relief, facilitating progress in the program's review.
Ghanaian authorities are currently participating in the WBG/IMF annual meetings in Marrakech to finalize an agreement with external creditors by November 2023.
This Memorandum of Understanding (MoU) will outline specific debt treatments to be agreed upon by external creditors as part of Ghana's ongoing three-year IMF loan-support program, which aims to ensure macroeconomic stability, debt sustainability, inclusive growth, and the protection of vulnerable populations.
- Reporting by Francis Ntow: Editing by Adewale Adejoke
