IMF deal: Last hurdle for a bailout has been crossed, says John Kumah

A deputy of finance says he is very confident China will support Ghana to bring Ghana some financial sustainability

Winifred Lartey May 12, 2023

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John Kumah is a deputy minister of finance and former chief executive of the National Entrepreneurship and Innovation Programme (NEIP) — John Kumah, deputy finance minister

A deputy finance minister, John Kumah, has said that the last hurdle for Ghana to cross before going to the IMF board has been crossed.

“It means that all preconditions have now been met,” he said on Asaase 99.5 Accra’s breaking news.

According to Kumah, “The Paris Club represents the majority of Ghana’s external creditors, and they have agreed to form the creditor committee at the request of Ghana.”

“If you can remember, the Finance Minister, Ken Ofori Atta, went to China and requested the Chinese government to co-chair on the creditors committee, and on that request, China has agreed to co-chair with France on the creditors committee, so this is a clear signal of Ghana’s readiness to now go to the IMF board.”

Kumah noted that, at the end of the day, the world recognises Ghana as a very important partner in the world of global trade.

“We have the assurance from the IMF, especially the managing director, who has already stated that she will move with speed as soon as the financial assurances are granted, and we look forward to hearing from them any moment from now.”

He added that specific demands from the IMF board have not yet been discussed, adding that “it is the global approval that has been given.”

“I strongly believe that based on our negotiations and our ability to convince China, and within the framework that has been approved, Ghana should have major benefits and some reliefs on our debt so that we achieve financial sustainability.”

“Clear path for a bailout”

A joint statement of the Creditor Committee for Ghana said, China and Paris Club have okayed Ghana’s request for an International Monetary Fund (IMF) support.

The creditor committee for Ghana formed by countries with eligible claims on Ghana has been formally established on 12 May 2023.

The creditor committee is expected to be co-chaired by China and France, an official statement has said.

The statement said, “The creditor committee examined the macroeconomic and financial situation of Ghana, including its long-term debt sustainability, and its formal request for a debt treatment under the “Common Framework for

Debt Treatments beyond the DSSI” endorsed under the Saudi G20 Presidency in November 2020, which was also endorsed by the Paris Club.”

“The creditor committee supports Ghana’s envisaged IMF upper credit tranche (UCT) program and its swift adoption by the IMF Executive Board to address Ghana’s urgent financing needs. The creditor committee encourages Multilateral Development Banks (MDBs) to maximize their support for Ghana to meet its
long-term financial needs,” the statement added.

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