IMF Managing Director applauds Ghana on debt restructuring

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, , has lauded Ghana on its debt restructuring process.

Kristalina Georgieva also applauded the country for reaching a Staff-Level Agreement with the Fund’s Mission team on its third review of the ongoing US$3 billion IMF loan-supported programme.

In a post on X (formerly Twitter) on Saturday, October 26, following a meeting with Ghanaian authorities at the 2024 Annual Meetings of the IMF and the World Bank Group (WBG), she said, “our commitment to supporting Ghana’s recovery remains strong.”

Ghana recently completed its Eurobond debt restructuring, achieving a 98 per cent exchange on the country’s US$13bn debt, surpassing the 65 per cent international benchmark set by bondholders.

This leaves the country only with finalising debt reforms with its bilateral commercial creditors, which the Fund has urged the government to ensure that it got the most favourable offer.

“The government needs to stay strong and make sure that it gets the best deal it can for the people of Ghana,” the IMF African Director said, while acknowledging the progress made on debt restructuring.

Mr Selassie said this during a press briefing on Friday, October 25, noting that the recent external debt agreement aligned with the country’s goal of achieving debt sustainability by bringing debt-to-Gross Domestic Product (GDP) to 55 per cent by 2028.

Earlier in October, Dr Mohammed Amin Adam, Finance Minister, said the completion of the Eurobond debt restructuring had resolved the country’s default on international bonds, “marking a significant milestone in its economic recovery.”

He pledged the government’s commitment to ensuring fiscal consolidation continued, with a focus on optimising domestic revenue mobilisation while implementing stringent expenditure controls to avoid fiscal slippages.

In a related development, the Minister on the margins of the IMF/WBG meetings, signed a US$260m deal with the World Bank to reform the country’s energy sector, resolving inefficiencies, and positioning to attract more investments.

The deal comprises a US250m credit metering procurement package and a US$10m clean cooking grant component in line with the Bank’s Programme for Results (PforR) initiative.

It is expected that the programme lead to a drastic reduction in the country’s metering gap, and an integration of the new metres into the billing system to improve upon commercial loss.

Targets under the programme also include transmission of energy generation in the most cost-efficient way, transparency in the Cash Waterfall Mechanism, and optimal reduction in losses in ECG revenue collection

The reforms, Dr Amin Adam, said would help address immediate challenges within Ghana’s energy sector but also to lay a foundation for long-term sustainability.

That, he said was aligned with the country’s national development goals and enhancing economic growth prospects.