IMF bailout: Paris Club, China and other creditors agree to form Committee

Ghana’s Minister for Finance, Ken Ofori-Atta, has divulged that the country has made significant progress in its discussions for debt treatment with the Paris Club and other bilateral creditors.

This was shared after a meeting on March 21, 2023, with Ghana’s creditors. The Paris Club, together with other creditors including China, India, Saudi Arabia, and Turkey, agreed at the meeting to form the Official Creditor Committee (OCC) and deliver financing assurances to the IMF as soon as possible, in order to clear the path for an IMF executive board approval of Ghana's programme by early May.

Ken Ofori-Atta, leading a high level government delegation to China last week, also requested for China to Co-chair the Official Creditor Committee.

The Finance Minister of China, Mr. Liu Kun, on his part said that his country has confidence in the management of the Ghanaian economy, and that his country felt a responsibility to be of help as Ghana seeks debt servicing relief.

At a meeting in Beijing, Mr. Kun said the Chinese authorities “have confidence in Ghana's economic management and its long-term economic viability.”

Mr. Kun said he wanted to ensure that Ghana’s external debt treatment request was considered expeditiously and was thus accompanied to the meeting with Mr. Ofori-Atta by a high level delegation including Mr. Wu Fuli, Chairman of China Exim-Bank.

Minister Kun said: "We know that these are short-term challenges which we, as responsible creditors, remain committed to resolving.”

“The long-standing and prosperous relationship between Ghana and China imposes on us a responsibility to help,” the Chinese Finance minister added.

He said that just like other African countries, Ghana was facing economic difficulties from a once-in-a-lifetime pandemic, geopolitical tensions and interest rate hikes in advanced countries with a contagion effect on developing countries.

The Chinese officials committed to help Ghana resolve the current short-term liquidity challenges and continue to support Ghana's medium and long-term development aspirations.

They said China believed in promoting debt sustainability and sustainable development, and would advocate for more concessional and grant funding for Ghana, especially at this time.

"Ghana needs more concessional and grant fund from creditors,” said Mr. Zhang Wencai, Vice President of China Exim bank, adding that “the Multilateral Banks should therefore do more for Ghana.”

This week, all eyes are on Ghana’s parliament which will consider three key revenue measures whose approval is expected to rake in GH¢4.4 billion in domestic revenues.

It is one of the major actions on the part of Ghana, critical to trigger IMF Executive Board approval of a $3 billion dollar facility for the country to ease its current economic difficulties.