Abena Osei-Asare, the Deputy Minister for Finance, has expressed optimism about the prospects for a fruitful discussion between the Minister of Finance, Ken Ofori-Atta, and China regarding the negotiations for debt restructuring.
It is anticipated that Ken Ofori-Atta will continue bilateral talks with China while also seeking financial assurances for Ghana’s program with the International Monetary Fund while he is in China. Ken Ofori-Atta left Accra on Monday, March 20, along with a government delegation.
During her speech in Accra, which took place during a signing ceremony between the National Health Insurance Authority and the United States Agency for International Development (USAID), Abena Osei-Asare called on Ghana’s bilateral partners, such as USAID, to assist the government in establishing the Ghana Financial Stability Fund as a component of its efforts to get the economy back on track.
Ghana, which is going through its worst economic crisis in a generation, was able to secure a staff-level agreement with the International Monetary Fund (IMF) in December for a loan of $3 billion.
However, asking lenders to provide financing assurances is a condition for the IMF’s board to sign off on the program. Ghana is currently struggling with its worst economic crisis in a generation.
Ghana owes approximately $1.7 billion to China, making that country its largest bilateral creditor.
This month, a Chinese delegation traveled to Ghana for the first round of debt negotiations, which the Ghanaian finance ministry described as “cordial and fruitful.”
In practice, Ghana went into default on the majority of its external debt last year when it stopped making payments on that debt. The country still needs to work out a solution with the private international bondholders it owes money to.
Ghana has already reorganized its domestic debt, and the country has made a request to rework its bilateral debt in accordance with the common framework platform that is supported by the Group of 20 major economies.
There has not yet been the establishment of a formal creditor committee in preparation for discussions with sovereign creditors.