$3bn IMF bailout: Key global decision makers push for Ghana

Key decision makers in the global economy have thrown their weight behind Ghana’s quest for a quicker deal from the International Monetary Fund (IMF) to help ease the economic pains facing the country and its citizens.

The IMF, the World Bank Group and the United States (US) Treasury Department are some of the key actors behind the clarion call for all roadblocks delaying the final approval of Ghana’s request for an IMF bailout to be removed to enable the fund to authorise the actual implementation of the programme, latest within the second quarter of the year.

This came to light at the just-ended IMF/World Bank Spring Meetings in Washington, DC, USA, where Ghana also secured the support of private sector investors and key development partners for a quicker deal for an economic turnaround.

Ghana, which turned to the IMF for support to stabilise the economy in July last year, has since met all prior actions necessary for a final approval, with the IMF Executive Board now awaiting financial assurance from the country’s creditors to be able to sign off the deal.

At the meetings that ended yesterday, the IMF Managing Director, Kristalina Georgieva, and the IMF African Department Director, Abebe Aemro Selassie, assured Ghanaians that efforts to fast-track the process were underway but must be quickened.

The momentum from the leaders has boosted the government’s optimism that the country could soon secure the much-needed financial assurances, a mix of debt cancellation, restructuring and commitment of further strategic lending, soon to pave the way for a deal, latest by the second quarter of the year.

“We are expectant that this (financial assurance) will happen soon, as the Paris Club meets again this week on Ghana,” a source at the Ministry of Finance said at the Spring Meetings.

Earlier, the Finance Minister, Ken Ofori-Atta, had described Ghana’s participation at the meetings as highly successful.

IMF MD
While expressing her support for a quicker deal for Ghana, the IMF MD said at the meetings that the country had done well to complete all prior actions, and that its creditors must now back the momentum to help secure an early deal.

Ms Georgieva said she would now use every opportunity to urge the creditors “to act swiftly”.

In a response to a question on when Ghanaians should expect a deal, she said: “We have worked very hard and very swiftly to have the programme for Ghana — a $3-billion support — in place.

“We have been urging Ghana’s creditors to act swiftly. My appreciation for the proactive role of the Minister of Finance of Ghana in reaching out to creditors. I can tell you that I use every opportunity myself to urge them to act swiftly,” she said.

Exemplary economic leadership
Ms Georgieva also described Ghana as an economic example that was devastated by global shocks, hence the need for all concerned to join hands in helping the economy to return to stability.

“Let us remember that Ghana, for a long time, has done really well to tap markets to finance its growth path. It has been, like all innocent bystanders, hit by COVID and the war in Ukraine, and these have complicated, domestically, the ability to finance the budget,” she said.

“So a country that has a long track record of sound macroeconomic management ought to be supported to return to markets. Our programme is a bridge for Ghana,” she said.

“And to tell you the truth, I am quite optimistic that Ghana is going to move; the creditors are going to move, and we are going to move swiftly. The short answer for you is: stay tuned and stay positive,” Ms Georgrieva said.

China’s posture
Mr Ofori-Atta has also expressed optimism that China, the country’s biggest bilateral lender, would grant it financial assurances.

China, which holds $1.9 billion of Ghana’s $5.5 billion bilateral debt, had been seen as a potential source of delay to the granting of financial assurances to the country.

But speaking to journalists in Washington, DC, Mr Ofori-Atta said China had been cooperative.

Successful participation
The Minister of Finance added that the country wrapped up a successful participation in the Spring Meetings with the formal unveiling of the road map of the Accra-Marrakech Agenda, which would culminate at the World Bank/ IMF Annual Meetings in Marrakech, Morocco, in October this year.

Giving further details on the country’s participation, he said the Ghana delegation was also scheduled to meet with officials of the US Treasury, private sector investors, the International Finance Corporation (IFC) and the US Export-Import Bank as part of efforts to strengthen the ties of friendship and economic cooperation between Ghana and the USA.

This follows closely on the heels of the recent visit to Ghana by the US Vice-President, Kamala Harris.

Source: graphic online