In order to help with Ghana’s debt restructuring efforts, the German Finance Minister, Christian Lindner, has requested that a creditors committee be quickly established under the common framework.
Following a meeting with Ghana’s Finance Minister Ken Ofori-Atta, Mr. Lindner stated that the country’s ability to resume economic growth will be made possible by the backing of the creditors.
“For Germany, it is essential to see a fair burden sharing among all creditors. We need a creditor committee as soon as possible.” He asked China, a major bilateral creditor of Ghana, to join the effort, saying, “I would like to call on all creditors to join the efforts as swiftly as possible.”
“We have to find new approaches to the over-indebtedness of low-income countries and the common framework is part of this solution and Germany is willing to play its role,” he said.
He made the call when Hon. Ken Ofori-Atta met with him to discuss bilateral relations between Ghana and Germany.
The discussions centered on the state of the IMF staff-level agreement, debt restructuring efforts in the G7 Common Framework, structural reforms in the energy sector, tax collection, and plans for digital money.
Mr. Lindner said it was important for Ghana to keep its credibility and turn around its economy quickly to be able to take advantage of the financial markets. He said Germany was aware of Ghana’s challenges and had “a vital interest in the success of the Ghanaian economy and we want to see West Africa as a whole stay stable. We are interested in the economic well-being and progress of Ghana.”
He said, “We know that there are opportunities for this country. It has dynamism and we really appreciate the efforts the government has made by expanding its human capital and focusing on improving social mobility but due to the COVID-19 pandemic situation and the impact of the Russian and Ukraine invasion the situation unfortunately is getting worse.”
According to him, for Ghana to be on a sustainable route to economic development over the coming years, its fiscal policies in the budget must be balanced, and it must maintain macroeconomic recovery and debt operations.
He applauded the government’s efforts to restructure public or sovereign debt as well as its efforts to help private banks maintain their capital and their capacity to finance future growth.
For his part, Mr. Ofori Atta stated that Ghana was currently a part of an IMF program that needed German assistance. Examples of this assistance included the creation of a creditor committee at the Paris Club to hasten the decision-making process and assistance with the IMF fund board to help Ghana receive approval by March 2023.
“Germany has always been strong with their support for us in terms of energy, financial services, and social inclusion and these are all critical components of our growth program,” he said.
He stated that Ghana’s debt profile had expanded by almost 20% and that the concept of debt restructuring and debt forgiveness needed to be reconsidered.
The choice Ghana’s international creditors make, according to Mr. Lindner, should be based on their shared humanity, understanding, and awareness of how to reposition the global framework “so that we can all have resilience.”
Present at the Meeting were Germany’s Ambassador to Ghana, His Excellency Daniel Krull, and other Officials of MoF and the German Embassy.
