The government of Ghana has been advised to be vigilant in her negotiations with private and Eurobond creditors to avoid being shortchanged.
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, visited President Akufo-Addo at Jubilee House on Sunday, March 17, 2024 where she gave him the advice.
According to her, Ghana had already embarked on “a very painful” debt restructuring and that should not be worsened by private and Eurobond Creditors who would try to twist her arms.
“To do a deal that would reverse progress is not going to be good for the country. You cannot allow the Eurobond Creditors to twist your arm because you have done a very painful domestic debt restructuring that has hurt people here. You have agreed to the debt principle with the official creditors of Ghana under certain conditions,” she added.
ZAMBIA
Madam Georgieva called for a fair deal with the Eurobond holders to avoid the Zambia situation where the official creditors disagreed with the restructuring terms with the commercial creditors.
“The deal with the Eurobonds has to be a fair deal, otherwise, we risk seeing what happened in Zambia. In October [2023], I thought the deal was done, then the private sector twisted Zambia’s arm and then tried to give them a better deal than the official creditors. So that is my reflection—a critical time close to the top. But we still need to do a bit of climbing,” she said.
PROGRESS
Kristalina, who began her tour of Africa from Ghana, told President Akufo-Addo that Ghana must ensure that it did not sign a pact that would thwart the progress trajectory of the nation.
She urged Ghana to complete negotiations with private creditors and Eurobond bond Creditors while completely defending the interests of the country.
“I heard a bit of discussion, but the sooner we do it, the better for the country. The sooner we do a great deal, the better for the country,” she stressed.
CONFIDENCE
According to Kristalina Georgieva, it is clear to the IMF that confidence in the Ghanaian economy is bouncing back, but urged the government to stay the course. She noted that the world economy had surprisingly remained resilient and that its growth rate had been stronger than predicted.
“For Ghana, this year cannot be more decisive because it is the year to bring back confidence in Ghana domestically and internationally, at the level it was before [the global economic challenges] or higher.
“We need to stay the course; your growth is better than expected, your inflation is lower than expected, the progress in debt restructuring has been faster than expected, and the task now is to cement what has been achieved,” Madam Georgieva added.
IMF DECISION
President Akufo-Addo, addressing Kristalina, stated that his government’s decision to secure a $3 billion extended credit facility with her institution has paid off.
He based the observation on the rate of recovery of the Ghanaian economy since the facility was secured in 2023.
President Akufo-Addo said his administration would continue to implement sound economic policies, as well as stay the course with regard to the current IMF programme the country was executing.
“It is obvious that the decision we made in July 2022 to come and seek your support for the difficult economic circumstances, which we were involved in, as far as I am concerned, is a decision that has already paid off. It has paid off in terms of the clear turnaround that we are seeing in our economy.
The President remarked that the very dire circumstances in which Ghana was at the time of the IMF move and today clearly justify the government’s decision to seek support, “and we have had very positive benefits from it,” he added.
IMPORTANT SIGNALS
Pointing to signals that the Ghanaian economy was stabilising, President Akufo-Addo cited the stronger than predicted growth, the decline in inflation, and interest rates, among others.
However, he attributed the success to the cooperation Ghana has had from the IMF and the World Bank, “that has brought us to this point.”
Meanwhile, he stressed that, having laid the foundation, the important step for the government was how it could engineer the rapid growth. He explained rapid growth as the way in which the mass of the people can benefit from the development of the nation.
