China pledges support for Ghana’s debt treatment

Chinese authorities have expressed their commitment to support Ghana to resolve the current short-term liquidity challenges.

China will also continue to support Ghana’s medium and long-term developmental aspirations.

“China believes in promoting debt sustainability and sustainable development,” the Chinese Minister of Finance, Liu Kun, said.

He gave the assurance when the Minister of Finance, Ken Ofori-Atta, led a high-level delegation from the ministry to China to engage in bilateral talks with his Chinese counterpart and other Chinese officials.

The discussions bordered on recent macroeconomic developments in Ghana and the subsequent application for support from the International Monetary Fund (IMF) as well as the G20 Common framework.

Engagement

Mr Ofori-Atta and his team, including Ghana’s Ambassador to China, Dr Winfred Nii Okai Hammond, engaged key Chinese government officials, including Minister Liu Kun, Chinese Minister for Finance, the Chairman of the Export Import Bank of China (Exim Bank), Wu Fuli, the Vice-Minister, Ministry of Foreign Affairs, Deng Li,  the Vice-Minister of the Ministry of Commerce, Li Fei, and the Vice-President of Exim Bank, Zhang Wencai.

Others were the Wang Weidong of the China Development Bank (CDB), the General Manager of the International Commercial Bank of China (ICBC), Yang Haitao, and the Chairman of the China International Development Cooperation Agency (CIDCA), Luo Zhaohui.

The Chinese finance minister’s assurances followed submissions by Mr Ofori-Atta explaining the rationale for the visit for bilateral discussions around Ghana’s debt position with China.

Mr Ofori-Atta thanked the Chinese authorities for their valuable participation in the G20 Creditor Committee meeting on Tuesday, March 21, this year in Paris, to consider Ghana’s debt treatment application.

The meeting was attended by both Paris Club members and other creditors.

The finance minister said China’s participation was a sign of China’s show of leadership in the global financial ecosystem and affirmation for their support for Ghana.

Pressures

Mr Ofori-Atta recounted recent global developments which had put severe strain on Ghana’s fiscal position.

Touching on the progress the country has made so far., he said a dedicated team from the fund and ministry worked assiduously to achieve Staff Level Agreement (SLA) in near record time of just five months.

The finance minister informed his Chinese counterpart that Ghana’s Fund programme required steep fiscal adjustments, debt restructuring, and financing assurances.

He mentioned the how the country had just gone through a painful but necessary Domestic Debt Exchange Programme, with an 85 per cent participation rate, which he said, was a demonstration of the country’s preparedness to take the necessary action to readjust its fiscal path.

Chinese support

In response, Mr Kun said, “we know that these are short-term challenges which we as responsible creditors remain committed to resolving” and that “the long standing and prosperous relationship between Ghana and China imposes on us, a responsibility to help”.

The Chinese Finance Minister further said it was the hope of his country that Multilateral and Commercial creditors would also fully participate in the interest of burden sharing.
“Chinese authorities have confidence in Ghana’s economic management, and its long term economic viability,” Mr Kun said.

He added that like other African countries, Ghana was facing economic difficulties from a once in a lifetime pandemic, on-going geopolitical tensions and continuous interest rates increases by developed economies which were having a spillover effect on developing countries.

Co-chair 

To a request by Mr Ofori-Atta for China to co-chair the Official Creditor Committee, the Chinese authorities said they would consider that.

The Chinese further committed to advocating for more concessional and grant funding for Ghana, especially at this challenging time.

For his part, the Vice-President of the Exim Bank of China, Zhang Wencai, stated that “Ghana needs more concessional and grant fund from creditors”.

He, therefore, called on the World Bank to do more for the country.

Source: Graphic Online