IMF deal in danger if China rejects Ghana’s debt relief proposal – German Ambassador

Source the Ghana Report

The German Ambassador to Ghana, Daniel Krull, has disclosed that the $3 billion bailout being sought from the International Monetary Fund (IMF) will be at risk if China fails to agree to a debt relief package with Ghana.

Mr Krull’s reaction follows President Akufo-Addo’s call on the German Finance Minister, Christian Lindner, on February 3 to “encourage” China to accept Ghana’s proposal for debt relief with its largest external creditor, China.

The president made the call when the visiting German Finance Minister, Christian Lindner, called on him at the Jubilee House, Accra.

The Asian country claims about $1.7 billion of the entire external debt portfolio of $5.7 billion, which Ghana seeks to restructure.

Addressing the media on February 22, Mr Krull said China has so far rejected attempts by officials from Ghana to engage them to commit to setting up a creditors’ committee for an agreement on a debt package.

Meanwhile, the Finance Minister, Ken Ofori-Atta, on Thursday, February 23, disclosed that the government’s planned high-level meeting with Chinese creditors over Ghana’s debt restructuring had been postponed to late March 2023.

According to him, this is due to the upcoming National People’s Congress of China, scheduled for early March.

However, Mr Krull revealed that other creditors would only play their part and help if China – the biggest creditor to Ghana – agreed to the debt relief package.

“We are prepared to live up to our responsibility as one of the major bilateral creditors to Ghana, but we are only ready to implement our solidarity if certain criteria are met. In this first place, it has to be done in an internationally coordinated fashion, and therefore we have the G20 common framework. The G20 has agreed on how to deal with these kinds of crises, and we feel that it is important that this framework is respected.

“The second condition is that we are ready to take our part when others are ready to do that, so all major creditors must be ready to help Ghana. The Big elephant in the room is China. China is the largest creditor to Ghana, and so far [China] is not supportive of setting up a creditors’ committee, where the creditors will sit down and agree on an aid package for Ghana,” the ambassador explained.

Mr Krull appealed to MPs and politicians who have business relations with China to encourage their Chinese counterparts to agree to the aid package to help rescue Ghana’s economy.

“The President and the Finance Ministers have appealed to Germany to support Ghana in convincing China to come to the table, and we are ready to do that, but at the same time, I want to appeal to all Ghanaians who have strong ties to China, who are doing nice business with China also to engage them and convince them that it is time to sit down with all the creditors and agree on a package. Time is of the essence. Without this agreement, the IMF package is in severe danger.”


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