Ghana is close to signing a Memorandum of Understanding (MoU) with bilateral creditors as part of the restructuring of debts owed to these lenders.

The Managing Director of the International Monetary Fund (IMF) Kristaline Georgieva revealed that “Ghana is in a good place now because it has advanced negotiations with the bilateral creditors on restructuring of debts.”

“There is very tangible progress made towards signing a Memorandum of Understanding with bilateral creditors” the Managing Director of the IMF added.

Madam Georgieva was responding to a question posed by JOYBUSINESS during a roundtable engagement with some journalists in Accra during this two-day working visit to Ghana.

She noted that reaching a deal with these creditors should provide space for the Government to spend on critical areas to help stabilize the economy.

Negotiating with private creditors

The IMF Managing Director also justified her push for Ghana to be tactful in their debt negotiations with Eurobond holders and private creditors. She is warning that Ghana's three bailout packages may be in jeopardy if the country fails to secure a fair restructuring deal with Eurobond holders.

The Finance Ministry has had a tough time forcing through a domestic restructuring programme, which was widely criticised by all stakeholders. Hopes were high that the country would have smooth sailing after it secured creditor assurance from the official creditor committee, which includes China.

However, in a meeting with President Akufo-Addo during her official visit to Ghana, the IMF head said Ghana may suffer severe setbacks similar to the case in Zambia, where they have difficulties unlocking the full bailout package. Ghana currently needs to restructure a total of approximately $13 billion, which it owes to Eurobond holders.

“Ghana is indeed benefiting from the experiences of countries that have gone for debt restructuring under the common framework. The sooner we do a great deal the better for the country. To do a deal that may actually reverse progress is not going to be good for the country. You cannot allow the Eurobond creditors to twist your arm. Why? Because you have done a very painful domestic debt restructuring, you have agreed in principle on debt restructuring with the official creditors of Ghana under certain conditions. The deal with the Eurobond has to be a fair deal vis-a-visa what was already done otherwise we risk seeing what happened in Zambia,” she stated.

She said her meeting with President Akufo-Addo came at an opportune time that will be quite decisive for years to come, “because we are climbing a mountain and we are doing quite well, we are not yet at the top, we need to keep climbing so there’s radiation of responsibility we need to complete with private creditors but complete defending the interest of the country.”

Ghana’s Performance under the IMF Programme

Ghana has been able to meet almost all the key targets set under the programme, looking at indicators such as inflation rate and growth.

The IMF head noted that Ghana's Programme with the Fund came in at the right time, and current developments have shown that Ghana took the right decision seeking support from the IMF to help stabilize the economy.