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Ghana Requests Relief From Debt Under G20 Common Framework: IMF Director Confirms
Kristalina Georgieva, the managing director of the International Monetary Fund, said on Sunday that Ghana had requested debt relief under the Common Framework program, which is backed by the Group of 20 major nations.
According to a source with knowledge of the matter, Ghana reportedly requested on Tuesday to restructure its bilateral debt under the Common Framework initiative backed by the G20.
The nation in difficulty is the fourth to submit an application to the G20 initiative, which was established in 2020 and intended to simplify debt restructuring operations as poorer nations began to falter as a result of the COVID-19 pandemic’s effects.
In a blog, Georgieva iterated that “Ghana just became the fourth country to seek treatment under the Common Framework, sending a signal that it is seen as an important pathway for debt resolution.”
China and other non-Paris club members are intended to be involved in debt relief negotiations as part of Ghana’s debt restructuring under the Common Framework.
According to data from the International Institute of Finance (IIF), China is Ghana’s largest bilateral creditor with a debt of $1.7 billion, while Paris club members are owed $1.9 billion by the country.
Due to the lengthy delays experienced by other nations using the procedure, Ghana, which completed a $3 billion staff-level deal with the International Monetary Fund (IMF) in mid-December, has been hesitant to submit this request.
The Common Framework has received harsh criticism for moving at a glacial pace despite being intended to allow for quick debt restructuring.
Early in 2021, Chad, Ethiopia, and Zambia joined. While Zambia is currently in negotiations, Chad was able to reach an agreement with its creditors in November.
“Countries seeking debt restructuring under the Framework will need greater certainty on processes and standards, as well as shorter and more predictable timelines,” Georgieva emphasized on the blog on Sunday.
