Remain steadfast, adjust lending toolkits to vulnerable members – BoG Governor to IMF

The Governor of the Bank of Ghana, Dr. Ernest Addison, has urged the International Monetary Fund (IMF) to remain steadfast and adapt its lending toolkits to changing global conditions to serve its vulnerable membership better.

This follows acute debt challenges underscored by rising social and infrastructural needs, amid spillovers from the Covid-19 pandemic, the war in Ukraine, the tightening of global financing conditions, and climate-related disasters

Speaking on behalf of Governors of African Central Banks at the ongoing IMF/World Bank spring meetings in Morocco, he said: “We restate our earlier request for increased concessional financing by aligning Poverty Reduction and Growth Trust (PRGT) access thresholds with those of the General Resources Account (GRA) to ensure uniformity of treatment”.

In addition, Dr. Addison said “We call on the Fund to relax the PRGT eligibility criteria to foster access to adequate Fund support while reducing, suspending, or eliminating entirely surcharges for most vulnerable PRGT-eligible members facing acute debt challenges. We also reiterate our call for additional pledges from willing donors to close the gaps in PRGT resources. We further stress the criticality of a successful completion of the ongoing 16th General Review of Quota (GRQ) to reinforce IMF finances while protecting the quota share of the vulnerable members”.

The Governor also said the strengthening of multilateral coordination and efficiency of regulatory framework for debt resolution in LICs, through a formidable Global Sovereign Debt Roundtable (GSDR), is paramount.

While welcoming the latest developments on Zambia and Chad, he said “We underscore the need to revamp the G20 Common Framework (CF) to ensure timely, orderly, equitable, inclusive, and transparent debt restructuring for distressed members in the region including, Ghana, Ethiopia, and Malawi”.

In this regard, he called call for a carefully designed debt resolution mechanism, especially, for vulnerable members with large[1]domestic creditors as in the case of Ghana to help avert domestic financial market instability.

“In addition, improving debtor-creditor engagements through an enhanced GSDR while strengthening technical support to foster common understanding of all debt issues is macro-critical to bolster a swifter, proactive and systematic restructuring. We also reaffirm the request for debt standstill during times of negotiations to offer immediate relief to debtors and restate our request for multilateral debt cancellation for the most vulnerable members facing acute debt challenges”.

Furthermore, the Governor said an enhanced IMF’s cooperation with MDBs/RDBs is necessary to facilitate timely provision of MDBs/RDBs’ financial assistance for members facing significant debt and growth challenges.

He concluded by calling for the deepening of the Fund’s tailored capacity development and surveillance support, in collaboration with other international partners, saying, it is crucial to addressing member-specific bottlenecks for restoring public debt sustainability, and bolstering inclusive and sustainable economic growth and development in the region