Facts of the IMF report on Ghana

I have sighted your (Joy FM) article where you quote the IMF as saying that, “China will have access to Ghana’s mineral revenue, electricity sales in default of 4 loans.”

The attribution to the IMF comes from the recently released IMF Country Report No. 23/168, dated May 2023, which details Ghana’s request for a 3-year Enhanced Credit Facility.

Your headline, captured under a photo of Ghanaian and Chinese flags has gone viral because of its alarmist nature.

Indeed, every Ghanaian will be alarmed as the prospect of losing its mineral revenue and sales from electricity in the event of a debt default.

Here are the facts of the IMF Report

1. The IMF has not made a categorical statement that “China will have access to Ghana’s mineral revenue, electricity sales in default of 4 loans.” In fact, the IMF didn’t use the word ‘default’ when describing Ghana’s collateralized debt to China. See page 52 for the exact verbiage.

2. Under Annex III of the country report titled Enhanced Safeguards for Ghana, the IMF simply provided a snapshot of our debt composition and listed out two debt stocks (senior debts and China collateralized debt) that pose little to no risk to the program we have agreed to. That’s why the IMF called Annex III Enhanced Safeguards for Ghana. Something that has been termed as a safeguard cannot be misconstrued to become a risk like you have done.

3. The IMF simply provided an accurate description of our collateralized debt to China. It did not do that to paint the picture that Ghana stands the chance of defaulting. Please see Page 52 of the full country report.

4. Again, the IMF did not use the word ‘default’ as you have falsely attributed to them. Ghana was required by the IMF to restructure its debt with creditors including China, and as you are aware, the financial Creditor Committee for Ghana Under the G20 Common Framework for Debt Treatments issued a statement that provided the financing assurances needed by the IMF to approve the program. See the IMF press release on May 12, 2023 as well as the Joint statement of the Creditor Committee for Ghana under the Common Framework for Debt Treatments beyond the DSSI, dated May 12, 2023.

5. In Annex II (Risk Assessment Matrix) of the IMF report, the agency discusses risks to the program. However, nowhere does the IMF list the country’s collateralized debt to China as one of the risks.

6. The IMF talks about our debt to China in Annex III under the theme Enhanced Safeguards for Ghana because the IMF sees Ghana’s collateralized debt to China as ONLY a meagre percentage (2%) of our overall external debt or (.9%) of our GDP which amounts to $619 million of loans acquired between the period of 2007 to 2018.

7. Collateralizing statutory receipts or meagre portions of our mineral resources for infrastructural development is not new. Examples abound; Synohydro was a barter trade agreement to raise money to build roads and then pay with commensurate refined bauxite.

8. Ghana does not stand the risk of losing its mineral revenue and electricity sales to China as you claim.

9. The gloomy picture you have painted is an example of the bad faith journalism that has become homestay in our media landscape. It is very important that the media takes its time to understand these technical reports and educate the public even as it chooses to give its own interpretation to the contents.

10. As a matter of education to those reading. We have taken a little over $2 billion from China from 2007 to 2019. Of that amount, $619 million falls under collateralized. Some of the projects the loans have been used for include Bui Dam, Atuabo Gas pipeline, Tamale interchange, roads in Nhyinahin and its environs, 56.4 kilometers Jasikan-Dodo Pepesu road, the yet-to-be-completed Takoradi PTC Interchange among others. Lastly the debt restructuring discussions Ken Ofori-Atta had with China included all of these loans.

11. The IMF may in the future deem any loan as a risk to Ghana. The IMF may in the future highlight other loans that we can default on as they have done in the past. But it stands, the IMF has not stated categorically that Ghana stands to default on its collateralized loan with China. As Kwaku Baako typically says, precision!