Abebe Selassie, IMF Director of the African Development speaks on regional economic outlooks for Sub-Saharan Africa and the status of African economies, during an interview with Reuters in Abuja, Nigeria April 30, 2019. REUTERS/Afolabi Sotunde - RC18E721A800

The International Monetary Fund (IMF), has revealed that it has secured the needed financing assurance from bilateral creditors that will help to conclude the second review for the necessary disbursement to be made to Ghana.

Director of the African Department, Abebe Aemro Selassie said this in response to a question posed by Joybusiness during the Regional Economic Outlook for Sub-Saharan Africa at the IMF / World Bank Spring Meetings in Washington DC, USA.

The Africa Department head noted, “To be clear, they have provided financing assurances though, and that remains in effect.” “And so, we are not envisaging that it will be an issue for our ability to conclude the next review and provide the disbursement that is pending” Mr Abebe Selassie added.

He maintained “So we don’t think there will be an issue when it comes to concluding the second review under the IMF programme.”

He also added that the most important issue here is that “we have reached a staff-level agreement on the second review and we can progress.”

Status of MOU on Bilateral Agreement for Ghana

There have been reports that Ghana had finalized the terms that will guide the Memorandum of Understanding (MOU) for restructuring the bilateral debts.
That would have led to Ghana signing an MOU with the bilateral creditors soon.

But responding to a question posed by JOYBUSINESS in Washington DC, USA, the African head of the IMF maintained that, there is currently no Memorandum of Understanding between the Bilateral Creditors and Ghana.

The Director of the African Department at the IMF maintained “We are hopeful that a deal will be reached soon, based on what has happened over the past week.”

The IMF after reaching the staff-level agreement on the completion of the second review for Ghana, had maintained that an agreement on this Memorandum of Understanding with the Bilateral Creditors is needed, so it can go to its board for approval on the staff completion of the second programme review.

Negotiations with Eurobond holders and Private creditors

The government has been forced to commence fresh re-negotiations with the Eurobond holders and commercial creditors over new terms for restructuring their debt. This was after the IMF earlier rejected proposals put forward by the government to these commercial creditors and Eurobond holders.

But responding to these developments, the Director at the African Department of the IMF maintained that, “we are grateful that the government shared with us some of the terms that were under consideration.”

He added that the staff had provided their inputs, on whether these terms were consistence with programme parameters; however, on the other hand the government has decided not to pursue this deal just yet.

“We are also hopeful that whatever deal that they reach, will be consistent with the programme parameters” the IMF Africa Director added.

Mr Selassie noted “Again, I think we are very hopeful that there will be movement and that they can reach an agreement consistent with the programme parameters, helping lower Ghana’s debt burden at the right level and avoiding, of course, people of Ghana having to make too much sacrifice.”