IMF assures continued financing for Ghana despite not reaching agreement with private creditors

The International Monetary Fund (IMF) has reassured Ghana that despite not reaching an agreement with its Eurobond holders, it will continue to provide more financing to the country.

This reassurance was made by Abebe Selassie, the African Director of the IMF during a press conference at the ongoing IMF/World Bank Spring Meetings in Washington, DC.

He stated that the IMF has always adjusted its policies to support countries in a timely and efficient manner.

Speaking further at the press briefing, Mr Selassie expressed hope for a positive outcome in the negotiations between Ghana and its commercial creditors saying, “With respect to Ghana, discussions are ongoing just a few months after official creditors provided financing assurances. The government is in good faith discussions with their creditors, and we hope that there will be an outcome. Although they have not reached an agreement with their Eurobond holders, this will not prevent us from providing more financing, although reaching that agreement is, of course, important.”

He further clarified the status of negotiations with bilateral creditors, saying, “As of now, there is no MOU [Memorandum of Understanding] with bilateral creditors, but we know that there have been intensive discussions in recent weeks and those are continuing. We are very hopeful that there will be an agreement with bilateral official creditors. They have provided financing assurances, and that remains in effect. So, we are not envisaging that it will be an issue for our ability to conclude the next review and provide the pending disbursement.”

Regarding discussions with commercial creditors, Mr Selassie mentioned that the government had shared some terms under consideration with the IMF.

“Staff has provided input on whether these terms were consistent with program parameters, and the government has decided that they would not pursue this deal just yet. We are hopeful that there will be movement and that they can reach an agreement consistent with the program parameters, helping lower Ghana’s debt burden at the right level and avoiding excessive sacrifices by the people of Ghana,” he quipped.

He expressed confidence in the Government’s ability to conclude a debt restructuring deal with its commercial creditors asserting, “I am hopeful also that the private sector creditors are also approaching it with that view. But negotiations take time, and I am not sure I can give a timeline. This is something that is between Ghana and its creditors, so I will leave it at that.”

Source: norvanreports I IMF/World Bank April Spring Meetings