Ghana is optimistic about signing an agreement with external creditors in November

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Finance Minister Ken Ofori Atta
Finance Minister, Ken Ofori Atta

Mr Ken Ofori-Atta, Finance Minister, has expressed confidence in the Government securing a Memorandum of Understanding (MoU) with its external creditors by November.

That, Mr Ofori-Atta said would increase stakeholder and investor confidence in the Ghanaian economy, thereby, helping accelerate efforts to ensure macroeconomic stability, debt sustainability, and inclusive growth.

The MoU would spell out specific debt treatment that external creditors would agree on with Ghana as part of the implementation of the government’s ongoing 17th International Monetary Fund (IMF) loan-support programme.

This comes as Ghana reaches a Staff-Level Agreement with IMF for the first review of its US$3 billion Extended Credit Facility (ECF) for the disbursement of a second tranche of US$600 million after Executive Board approval.

The loan-support programme is to ensure Ghana’s macroeconomic stability, debt sustainability and chart a path for inclusive growth, while protecting the vulnerable.

Speaking at a press conference at the end of the IMF Staff Mission in Accra on Friday, Mr Ofori-Atta said the government would use the IMF/World Bank Group (WBG) Annual Meetings in Marrakech next week to firm up agreements.

“We’re optimistic that our bilateral creditors will deliver the MoU in time in November for our Board as we continue our engagement, which have continued to be positive.”

“We’re also making progress with our engagement with the Eurobond holders and official lenders, and we hope to pursue this in our trip to Marrakech (Morocco) for the IMF/WBG annual meetings,” he added.
He explained that the implementation of the IMF-supported Post-COVID-19 Programme of Economic Growth (PC-PEG) had led to strong signs of macroeconomic recovery and stability.

“Gross Domestic Product (GDP) growth has rebounded strongly, averaging 3.2 per cent in the first two quarters of 2023, compared with the same period in 2022, mainly on the back of growth in Services and Agriculture,” he said.

“The latest price development in August 2023 also indicates a fall in headline inflation after a consecutive upward trend since May 2023, but it’s dropped to 40.1 per cent,” the Finance Minister noted.

He also said the Cedi had remained relatively stable from the beginning of the year, having depreciated by 23.5 per cent cumulatively, with primary balance on commitment basis having a surplus of $2.2bn as of first half of 2023.

On his part, Mr Stephane Roudet, IMF Mission Chief for Ghana, said at the end of Ghana’s first review of the Fund’s loan support programme that Ghanaian “authorities’ strong policy and reform commitment under the programme is bearing fruit, and signs of economic stabilisation are emerging.”

He also indicated that growth in 2023 had proven more resilient than initially envisaged, inflation declined, fiscal external positions improved, with exchange rate having stabilised.

On Ghana’s performance on the implementation of the US$3bn-loan support programme, he said: “Faced with acute economic and financial crisis, the authorities have adjusted macroeconomic policies, successfully completed their domestic debt restructuring operation, and launched wide-ranging reforms.”

He, the Chief Mission, said it was critical for Ghana to secure an agreement with official creditors on the terms of a debt treatment consistent with the IMF Executive Board approval programme parameters and debt targets.

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