Tuesday, 23 July

Gov't secures MoU deal with official creditors

Minister of Finance Dr Mohammed Amin Adam

The Ghanaian government has secured an agreement on a Memorandum of Understanding (MoU) with its Official Creditor Committee (OCC).

The agreement, which addresses debt treatment agreed upon in January 2024, was co-chaired by China and France, who played pivotal roles in the negotiations. 

The MoU formalises the agreement in principle reached with the Official Creditors in January, marking a crucial step towards restoring Ghana's long-term debt sustainability.

"The financial terms of the agreement remain unchanged, providing significant debt service relief during the Fund-supported programme period," said Finance Minister Mohammed Amin Adam. 

He noted that this relief would enable the redirection of financial resources to critical areas such as infrastructure, healthcare, and education.

The formalisation of the OCC agreement is expected to pave the way for the IMF Executive Board to approve the second review of the Fund-supported Post-COVID-19 Programme for Economic Growth (PC-PEG). This approval will facilitate the disbursement of the next tranche of IMF financing, amounting to $360 million. Additionally, the IMF Board's approval is anticipated to unlock further financial assistance from development partners, particularly the World Bank.

The agreement is also expected to bolster ongoing discussions with private creditors, with whom Ghana is committed to finding a comparable agreement as soon as possible. Dr Adam urged official creditors to expedite their internal processes to sign the bilateral agreements required to implement the MoU.

"We call upon our official creditors to fast-track their internal processes towards the signing of the bilateral agreements," he said. Ghana continues to engage in good faith with all commercial external creditors, striving to finalise restructuring agreements that respect Ghana’s need for debt relief and the principle of comparability of treatment.

Dr Adam expressed his gratitude to the OCC members, especially the committee's co-chairs, China and France, for their unwavering support. "This landmark agreement marks an extraordinary milestone in Ghana’s debt restructuring journey and will further strengthen our ambitious reform agenda with the strong support of our development partners," he noted.

The historic agreement is expected to provide a solid foundation for Ghana's economic recovery and sustainable development, reinforcing the nation's commitment to transforming its economy beyond aid.

Source: classfmonline.com