June 13, 2024
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We’re committed to helping Ghana resolve current economic crisis ~ China assures

The Chinese government has given a strong indication that it is willing to help Ghana secure the balance of payments bailout from the International Monetary Fund (IMF). 

According to the Chinese government, it has an obligation to ensure the Ghanaian economy does not collapse. This is according to the Chinese Finance Minister, Mr Liu Kun. Mr Kun, explained that this is due to the confidence they have in the long-term economic prospects of Ghana. 

“We know that these are short-term challenges which we as responsible creditors remain committed to resolving. The long-standing and prosperous relationship between Ghana and China imposes on us, a responsibility to help”. “Chinese authorities have confidence in Ghana’s economic management and its long-term economic viability.”

Mr Kun also added that “China believes in promoting debt sustainability and sustainable development.”

Mr Liu Kun made the comments when Ghana’s Finance Minister, Ken Ofori-Atta, led a delegation to engage China over a $1.7 billion debt.

The Ghana delegation is made up of Technical Officials from the Ministry of Finance, the Ministry of Foreign Affairs and the Bank of Ghana.

Mr Ofori-Atta discussed the bilateral talks with China on debt restructuring as well as seeking financial assurances for Ghana’s programme with the IMF.

The objective of the engagement is not debt cancellation but to maintain that the issue will be discussed.

Mr Ofori-Atta has earlier said discussions with the Chinese government on the country’s debt restructuring programme have been positive.

According to him, Ghana will soon secure external assurances from China.

Mr Ofori-Atta in a tweet on Friday, March 24, also expressed optimism about the government passing the three new tax bills in Parliament. 

The Investment Banker added that the government is making significant progress on securing a deal with the International Monetary Fund (IMF).

Passing revenue measures as a pre-condition for IMF Programme

Government is hoping to get parliament’s approval for three revenue bills which are key requirements for securing a deal with the IMF.

The bills are the Income Tax Amendment Bill, the Excise Duty Amendment Bill and the Growth and Sustainability Amendment Bill, all expected to rake in about GH¢4 billion annually.

Earlier negotiations with Paris Club Members

According to the government, there has been some significant progress made in negotiations with the Paris Club.

Details on China’s Debt 

Ghana is hoping to restructure $5. 7 billion of its external debts,  with China holding a third of the figure, amounting to $1.7 billion dollars.

Ghana’s total debt owed its external creditors is pegged at $29.2 billion.

The structure of Ghana’s External Debt showed that Ghana owes China about 1.7 Billion Dollars. Eurobonds is 13.1 Billion Dollars, Multilateral accounts for about 8.1 Billion Dollars.

The rest are Paris Club Countries – $1.9 billion and other creditors accounting for $3.2 billion.

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