The United States government has pledged to assist Ghana in its efforts to seek debt forgiveness from the Paris Club as part of the International Monetary Fund’s (IMF) balance of payment support. The announcement was made by US Vice President Kamala Harris during a joint press conference with Ghanaian President Nana Akufo-Addo.
Mrs. Harris said the US will support Ghana’s engagement with the IMF and will encourage bilateral creditors to provide meaningful debt reduction for countries in need. She added that the US will provide all the support Ghana needs to overcome its current economic challenges.
“We welcome Ghana’s commitment to reform its economy for sustainable and inclusive growth,” Mrs. Harris said. “Our partnership is already strong, and I believe that today we have strengthened it.”
As part of its support, the US has announced that its Department of Treasury’s Office of Technical Assistance (OTA) will deploy a full-time resident advisor to assist Ghana’s Ministry of Finance in developing and executing medium-to-long-term reforms needed to improve debt sustainability and support a competitive, dynamic government debt market.
The project is aimed at complementing and building on the Government of Ghana’s debt restructuring efforts. It is part of OTA’s ongoing engagement to strengthen public financial management and financial sector oversight across sub-Saharan Africa.
Ghana has been grappling with its worst economic crisis in a generation, which has been exacerbated by the COVID-19 pandemic. In December 2020, the country secured a staff-level agreement with the IMF for a $3 billion loan, but lenders providing financing assurances is a condition for the IMF’s board to sign off the program.
Ghana is hoping to secure debt relief from the Paris Club, a group of 22 creditor nations, as it seeks to restore fiscal stability and promote economic growth. The country’s debt-to-GDP ratio surged to 76.1% by the end of September 2020, up from 62.4% in the same period in 2019. The government is currently implementing austerity measures to reduce the fiscal deficit and stabilize the economy.
The US government’s commitment to support Ghana’s debt relief efforts is a significant boost for the West African country, which has been struggling to overcome its economic challenges. With the US on board, Ghana is now better placed to secure the debt relief it needs to restore fiscal stability and promote economic growth.