IMF Engages International Creditors To Cancel Ghana’s Debt

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva has disclosed that the Fund is engaging some international creditors for a possible cancelation of Ghana’s debts.

According to her, the move is targeted at debt cancellation for countries with distress debt levels.

She stated that the countries incorporate Chad, Ethiopia, Zambia, Ghana, Lebanon, and Sri Lanka.

“It is very important for their people that we find the resolution to the debt problem, but the risk of contagion is not as high,” she said on American news channel CBS.

Ms. Georgieva explained that ongoing global condition makes it hard for debt distressed countries to respect their debt obligation because of international liquidity crush.

“Assuming the debt list continues to grow, let us remember that 25% of emerging markets are tragically stressed territory” she warned adding that global financial giants are themselves battling because of Coronavirus and the Russia invasion of Ukraine.

Giving some details, she stated that the IMF is engaging both traditional and non-traditional creditors to find some space for unfortunate countries in debt distress positions to bring some help.

“In the IMF, we are working very hard to press for that resolution for these countries. We have engaged the traditional creditors, and the non-traditional creditors, like China, India, and Saudi Arabia. We have to act now”, she stressed.

She brought up that 2023 will be a tough year for China, a major non-traditional creditor.

This, she said could further affect non-industrial nations with high debt level since China can not give cheaper funds.

Ghana starts debt rebuilding

The Internal Monetary Fund (IMF) in November, 2022 affirmed that administration of Ghana has declared its expectation to direct a debt operation ( also called debt rebuilding) in 2023.

According to an update on the fund’s website, “authorities [Ghana] have assessed their public debt as being unsustainable over the medium term. Together with efforts to cut the public authority shortfall down, they have announced their aim to direct a debt operation to guarantee debt sustainability.”

The Bretton Woods Foundation has welcomed government’s decision to tread the path of debt operation.

“We welcome the authorities’ expectations to execute strategies that will guarantee the sustainability of public finances” the Fund stressed.

READ: How To Check BECE Placement Results On Phone 2022

The IMF, however, indicated that the “nature of engagements and debt operations between Ghana and its creditors are sovereign decisions.”