Ghana’s $3bn bailout will restore macroeconomic stability – IMF Chief for Ghana
The International Monetary Fund (IMF) Mission Chief for Ghana Stéphane Roudet, has said that the $3 billion bailout that has been approved by the Fund will ensure macroeconomic stability in Ghana’s economy.
Similarly, he said, it will lead to inclusive economic growth in the coming months.
Mr Stéphane Roudetalso said the programme would result in reforms to encourage private sector investments and also build international reserves.
“There will be reforms in the energy and cocoa sectors,” he said during a joint Ghana -IMF press conference in Washington on Thursday, May 18.
“It will be restoring macroeconomic stability, for higher and more inclusive growth. It has reforms that will make the economy more resilient and likely to withstand shock in the future,” he added.
At the same press conference, Ghana’s Finance Minister Ken Ofori-Atta said there is no rush on the part of the government to return to the international capital market to borrow following the coming on board the $3billion bailout.
He said during a joint Ghana-IMF press conference in Washington on Thursday, May 18 when asked a question about Ghana returning to the capital market that “In addition to the revenue measures that we saw in the budget that are improving at GRA and that will give us the resource to move forward, curtailing and managing our expenditures are going to be important.
“There is no rush in going back to the international capital market, our expectation is that in managing our expenditure and increasing our revenue we will have the resources to do it, working towards the capital market is important because we don’t get our ratings up and make the country more attractive for investors, especially FDIs. So n one is rushing to the capital market at this juncture.”
The Board of the Fund unanimously approved Ghana’s bailout on Wednesday, May 17 at a meeting in Washington after Ghana secured the Paris Club financing assurance on Friday, May 12.
A press statement issued by the Paris Club on Friday, May 12 said “The creditor committee stresses that the Ghanaian authorities are expected to seek from all private creditors and other official bilateral creditors debt treatments on terms at least as favorable as those being considered by the creditor committee, in line with the comparability of treatment principle.
Consequently, it added “the creditor committee urges private creditors and other official bilateral creditors to commit without delay to negotiate with Ghana such debt treatments that are crucial to ensure the full effectiveness of the debt treatment for Ghana under the Common Framework.”
Also, a creditor committee for Ghana has been formed by countries with eligible claims to see to the quick implementation of the resolution. The creditor committee is expected to be co-chaired by China and France.
“The creditor committee examined the macroeconomic and financial situation of Ghana, including its long-term debt sustainability, and its formal request for a debt treatment under the “Common Framework for Debt Treatments beyond the DSSI” endorsed under the Saudi G20 Presidency in November 2020, which was also endorsed by the Paris Club.”
“The creditor committee supports Ghana’s envisaged IMF upper credit tranche (UCT) program and its swift adoption by the IMF Executive Board to address Ghana’s urgent financing needs.
“The creditor committee encourages Multilateral Development Banks (MDBs) to maximize their support for Ghana to meet its long-term financial needs,” the statement added.