The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has praised Ghana’s headway in restructuring its debt and its achievement of a Staff-Level Agreement on the third review of the ongoing US$3 billion IMF loan program.
Following discussions with the leaders from Ghana at the 2024 Annual Meetings of the IMF and World Bank Group (WBG), Georgieva expressed strong support for Ghana’s economic recovery path, assuring that the IMF remains dedicated to backing the country’s efforts.
Ghana’s recent success with its Eurobond restructuring, which saw an impressive 98% of the US$13 billion debt exchanged, exceeding the 65% benchmark set by international bondholders marks a great leap in addressing the country’s fiscal challenges.
With the Eurobond restructuring complete, Ghana now focuses on finalizing debt agreements with bilateral commercial creditors.
The IMF’s African Director, Abebe Aemro Selassie, encouraged the Government of Ghana to stay resilient in negotiations, advocating for the best possible deal to support the country’s citizens.
He stressed that the recent steps in Ghana’s external debt restructuring align with its objective of restoring debt sustainability, aiming for a debt-to-GDP ratio of 55% by 2028.
Ghana’s Finance Minister, Dr. Mohammed Amin Adam, earlier hailed the completion of the Eurobond restructuring as a crucial step in restoring the country’s financial standing and overcoming the default on international bonds.
Dr. Adam emphasized the government’s focus on fiscal discipline, underscoring ongoing efforts to boost domestic revenue generation while curbing unnecessary spending. These actions, he affirmed, are part of a broader strategy to solidify the nation’s economic recovery.
In tandem with the debt restructuring developments, Ghana has also inked a US$260 million agreement with the World Bank to advance reforms in its energy sector. This includes a US$250 million package for credit meter procurement and a US$10 million grant dedicated to clean cooking initiatives.
The reforms are anticipated to bridge country’s metering gap, with plans to integrate new meters into the existing billing system to cut commercial losses significantly.
Further objectives under this energy sector program target enhanced efficiency in energy transmission and transparency in revenue collection through the Cash Waterfall Mechanism.
The initiative, supported by the World Bank’s Program for Results (PforR), is expected to strengthen the Electricity Company of Ghana’s (ECG) financial performance by reducing revenue losses.
Dr. Amin Adam stated that these reforms will not only help tackle immediate challenges within the energy sector but also build a sustainable foundation for the future.
