DURING a private meeting on Sunday, IMF chief Kristalina Georgieva cautioned President Nana Akufo-Addo against compromising Ghana’s recovery efforts in negotiations for debt relief with commercial creditors. Georgieva emphasised the delicate balance Ghana must strike in securing relief while protecting its economic interests.
Georgieva’s comments, relayed to Reuters by sources present at the meeting, underscore the importance of Ghana’s stance in debt restructuring negotiations. Ghana, facing its worst economic crisis in a generation after defaulting on most external debt in December 2022, is navigating complex negotiations with creditors.
‘You cannot allow the Eurobond creditors to twist your arm,’ Georgieva advised Akufo-Addo, stressing the need for fairness in negotiations. She highlighted the risk of unequal treatment of creditors and its potential impact on Ghana’s recovery efforts.
Drawing parallels with Zambia’s debt restructuring challenges, Georgieva warned of the consequences of imbalanced negotiations. She noted Zambia’s struggles, where bondholders secured a more favourable deal, leading to objections from official creditors, including China.
In response to inquiries, an IMF spokesperson clarified the institution’s role in debt restructuring, emphasising the importance of meeting program parameters to restore debt sustainability. The spokesperson added, ‘The specifics of how to achieve this is left to sovereign governments and their creditors.’
Ghana has made strides in restructuring, reaching a deal in principle to restructure $5.4bn of loans with official creditors, including China and France. Negotiations with international bondholders, representing $13bn in debt, have entered a critical phase.
As Ghana navigates these negotiations, ensuring equitable terms and protecting domestic interests remain paramount. The outcome of these discussions will be pivotal in Ghana’s journey towards sustainable economic recovery amidst challenging circumstances.