Ken Ofori-Atta in China to discuss debt restructuring with officials

The Finance Minister of Ghana, Ken Ofori Atta, has embarked on a crucial trip to China to negotiate debt restructuring with officials of the country. Mr Ofori Atta, who is leading a government delegation, left Accra over the weekend via Addis Ababa where he attended the UNECA High-Level Ministers meeting on Global Financial Architecture. The Minister is expected to continue bilateral talks with China and seek financial assurances for Ghana’s program with the International Monetary Fund.

This trip is of great significance as Ghana is hoping to restructure $5.7 billion of its external debt, with China holding a third of it, amounting to $1.7 billion. The structure of Ghana’s external debt shows that the country owes China about $1.7 billion; Eurobonds, $13.1 billion and Multilateral, $8.1 dollars. The rest are Paris Club countries, $1.9 billion and other creditors, $3.2 Billion.

Mr Ofori Atta had earlier held meetings with officials of Exim Bank China in Ghana, all in the line of re-profiling the country’s debt to China. He has expressed optimism that a deal can be reached to enable Ghana to present its case before the IMF Board, however, the issue of comparability of treatment is a major concern, especially as China wants to do bilateral. The Finance Minister is hopeful that discussions on how China can envelop as quickly as possible can be resolved in the talks.

The visit was initially scheduled to hold in March but was postponed to the end of the month due to the National People’s Congress of China meeting in early March 2023. The Finance Minister’s visit to China marks a step closer to IMF program approval by the IMF Board, according to government sources.

Securing a deal from creditors such as China will be a significant step towards getting IMF Board approval for Ghana’s Economic Programme. The Ghanaian government is working to restructure the country’s debt with its external creditors, including China, and subsequently finding ways to secure their commitments to cancel Ghana’s debt.

Negotiations with Paris Club members have seen some significant progress, with requisite documentation submitted and the expectation of the formation of a creditor committee expeditiously. The successful resolution of debt restructuring with all external creditors would be a major boost for Ghana’s economy, as it would reduce the country’s debt burden and provide more fiscal space for the government to implement growth-enhancing policies.

The Finance Minister’s trip to China is expected to be a critical turning point for Ghana’s debt restructuring program. The outcome of the talks would determine the country’s ability to access much-needed financial support from the International Monetary Fund and other multilateral organizations. The Ghanaian government is committed to ensuring that the country’s external debt is restructured in a sustainable manner, and it is hoped that the negotiations with China would be successful in this regard.