The International Monetary Fund (IMF) is taking giant steps to have debts of Ghana, along with five other countries cancelled.
If the negotiations go through, Chad, Sri Lanka, Lebanon, Ethiopia and Zambia, are also to benefit from a possible cancellation of debts owed their respective international creditors.
The possible cancellation of debts owed international creditors by Ghana and the other countries follow the “distressed debt challenges” of the countries.
Making the disclosure in an interview on Wednesday, Managing Director of the IMF, Kristalina Georgieva stated that, “It is very important for their people that we find the resolution to the debt problem, but the risk of contagion is not as high”.
Ms. Georgieva explained that current global condition makes it difficult for debt distressed countries to honour their debt obligations due to international liquidity squeeze.
“If the debt list continues to grow, let us remember that 25% of emerging markets are tragically stressed territory” she warned, adding that global economic giants are themselves struggling due to COVID-19 and the Russia invasion of Ukraine.
Providing some details, she stated that the IMF is engaging both traditional and non-traditional creditors to find some space for poor countries in debt distress positions to bring some relief.
“In the IMF, we are working very hard to press for that resolution for these countries. We have engaged the traditional creditors, and the non-traditional creditors, like China, India, and Saudi Arabia. We have to act now”, she stressed.
She pointed out that 2023 is going to be a tough year for China, a major non-traditional creditor.
This, she said could further affect developing countries with high debt level since China will not be able to provide cheaper funds.
Ghana commences external debt restructuring discussions with creditors
Ghana, in December 2022 commenced external debt restructuring discussions with its external creditors.
Discussions with external creditors the Finance Chief Ken Ofori-Atta noted, was between the Government of Ghana and both bilateral and individual creditors.
According to the Finance Minister, Ken Ofori-Atta, discussions with external creditors had intensified and was hopeful external creditors would agree to Government’s external debt restructuring programme.
“We have already started external debt restructuring discussions with external creditors,” he noted at a press briefing in December last year.
Currently, Ghana’s debt to external creditors is in the range of $28bn.
By Vincent Kubi