Ghana’s external debt restructuring has taken a significant turn with the recent visit of a delegation from China’s Exim Bank to Accra to engage in talks with officials from the Ministry of Finance.
Ghana owes China around $1.7bn, and the talks are aimed at resolving the issue and securing a debt treatment program with external creditors.
This development is significant because China has been reluctant to participate in a creditor committee set up by the G20 to work on Ghana’s debt cancellation request. It remains to be seen whether the talks will lead to a positive outcome for Ghana, given China’s current stance on the matter.
Ghana’s request for debt cancellation has gained momentum, with the G20 countries agreeing to establish a creditor committee to work on the West African country’s debt cancellation request. However, the country must be prepared to meet strict debt cancellation conditions set by the committee, particularly given its dealings with China, which could pose a significant challenge in securing debt cancellation.
The successful conclusion of the debt treatment program is expected to set the stage for a strong recovery of Ghana’s economy, which has been grappling with economic challenges in recent times. Ghana is currently engaged in discussions with the IMF and external creditors to secure a debt treatment program that will enable it to restructure its external debt and restore its economic stability.
The situation remains uncertain, given China’s current stance, but Ghana remains optimistic about the prospects for securing a debt treatment program. The recent visit to Accra by a delegation from China’s Exim Bank is a positive sign that the country is willing to engage in discussions with Ghana, and this could pave the way for a positive outcome for the West African country.
Furthermore, President Akufo-Addo expressed his confidence that the country would secure Board approval for an IMF program by the end of March 2023. This would be a significant achievement, given that Ghana had already reached a staff-level agreement with the Fund in December 2022, which it is now working to fulfil systematically.
The successful conclusion of the program is expected to be a significant milestone in the country’s economic recovery and a cause for optimism for its citizens and investors alike. Ghana is looking to rebuild its economic stability and avoid the risk of defaulting on its external debt, which could lead to severe economic consequences.
The talks between Ghana and China’s Exim Bank are a significant development in the country’s efforts to secure a debt treatment program and restructure its external debt. The country must be prepared to meet strict debt cancellation conditions set by the creditor committee established by the G20, particularly given its dealings with China.
The successful conclusion of the program is expected to set the stage for a strong recovery of Ghana’s economy.