Assist Ghana In $3Billion IMF Deal

President Nana Akufo-Addo is pleading with Ghana’s allies to put in a word at the International Monetary Fund (IMF), where the country is seeking a $3billion External Credit Facility (ECF).

Government, led by Finance Minister Ken Ofori-Atta last year reached a staff level agreement with the Bretton Woods institution, but it is yet to receive approval from the Executive Board of the Fund.

Though government is hopeful, it wants these diplomatic representatives to assist Ghana hasten the process to get the Fund approve the facility.

Addressing members of the diplomatic corps at the 2023 Presentation of Diplomatic Greetings at Peduase Lodge in the Eastern Region on Tuesday, February 28, President Akufo-Addo expressed hope that the approval will occur by close of March.

He pointed out that already Ghana has had the tacit support of the so-called Paris Club.

“Just as we managed to achieve a staff level agreement with the Fund in record time in December last year whose terms were systematically fulfilling, including the difficult but ultimately highly successful process of the Domestic Debt Exchange Programme, I am confident that with the cooperation we have received from the members of the Paris Club and the People’s Republic of China, which had sent a delegation from China’s EXIM Bank to Accra over the weekend to meet with officials of the Ministry of Finance, we shall be able to go to the Board of the Fund to conclude finally the agreement by the end of March,” he said.

“This will set the stage for the strong recovery of Ghana’s economy. Needless to say, we will hope that all Ghana’s friends will weigh in with words of support at the Fund.”

President Akufo-Addo conceded that the country’s balance of payment in 2022 was thrown out of gear as a result of many factors including the Russia-Ukraine war, plunging the country into “considerable difficulties”.

But he indicated that the move to IMF was for a “short term” to repair the country’s public finances.

Meanwhile, the German Ambassador to Ghana, Daniel Krull, has warned that the $3 billion bailout being sought from the IMF, is in danger of not being approved if China fails to agree to a debt relief package.

“We are ready to take our part when others are ready to do that, so all major creditors must be ready to help Ghana. The Big elephant in the room is China. China is the largest creditor to Ghana and so far [China] is not supportive of setting up of a creditors’ committee, where the creditors will sit down and agree on an aid package for Ghana.”

At a press conference last Friday, the German Ambassador to Ghana advised the Akufo-Addo-led administration to cut its expenditure and the huge size of government if it sincerely needs his country’s to help convince China and the International Community to agree to a debt relief package.

He said it was out of place for Ghana to be crying to the international community for help but continues to operate a government bigger than that of Germany.

“I only can compare with other countries like my own and I can just come to the conclusion that the number is much higher than in my country. So that might bring me to the conclusion that maybe there’s room for improvement.

“Well, of course, it depends very much on what kind of expenditures you’re looking at… I’m convinced this is true for if I look at the budget of the German Foreign Ministry of the German government, I’m convinced there are important tasks that can be cut without hurting economic development. And I’m convinced without going into details this also is true for Ghana. There are certain expenditures that can be lowered substantially and make an important impact, and it has to be part of the package”.

“I mean, I cannot go out to the international community and say I need help, but I’m not willing to cut my own budget expenditures. I have to be careful not to cut the social expenditures that are destroying lives and families. I have to be very careful not to take measures that might negatively impact economic growth.

“But I’m convinced there are many expenditures that could be looked at very carefully and can be lowered substantially,” he added.

Mr Krull also warned that the $3 billion bailout being sought from the International Monetary Fund is in danger of not being approved if China fails to agree to a debt relief package.

He said China has so far rejected attempts by officials from Ghana to engage them to commit to the setting up of a creditors’ committee for an agreement on a debt package.

“We are ready to take our part when others are ready to do that, so all major creditors must be ready to help Ghana. The Big elephant in the room is China. China is the largest creditor to Ghana and so far [China] is not supportive of setting up of a creditors’ committee, where the creditors will sit down and agree on an aid package for Ghana.”

Source: Anchorghana