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German Finance Minister calls on G20 to form Creditor Committee on Ghana’s debts

The German Finance Minister, Christian Lindner, has called for a quick formation of a creditors committee under the common framework to deal with Ghana’s debt restructuring efforts. 

Speaking after a meeting with Ghana’s Finance Minister Ken Ofori-Atta, Mr Lindner said the support from the creditors would enable the country to restore economic growth. 

“For Germany, it is essential to see a fair burden sharing among all creditors We need a creditor committee as soon as possible. I would like to call on all creditors to join the efforts as swiftly as possible” he said, and urged China, as an important bilateral creditor of Ghana, to participate in such an effort. 

“We have to find new approaches to the over-indebtedness of low-income countries and the common framework is part of this solution and Germany is willing to play its role,” he said. 

The bilateral talks centred on International monetary fund (IMF) staff engagement and structural reforms in the energy sector, among others. 

Mr Lindner said it was important for Ghana to keep its credibility and turn around its economy quickly to be able to take advantage of the financial markets. 

He said Germany was aware of Ghana’s challenges and had “a vital interest in the success of the Ghanaian economy and we want to see West Africa as a whole stay stable. We are interested in the economic well-being and progress of Ghana.” 

He said, “We know that there are opportunities for this country. It has dynamism and we really appreciate the efforts the government has made by expanding its human capital and focusing on improving social mobility but due to the COVID-19 pandemic situation and the impact of the Russian and Ukraine invasion the situation unfortunately is getting worse.” 

He said Germany, which was Ghana’s second largest bilateral creditor, was ready to support Ghana’s effort to bounce back economically. 

He said Ghana needed to balance its fiscal measures in the budget, ensure macro-economic recovery and debt operations to be on a sustainable path to economic development over the next few years. 

He commended the government for its efforts to restructure public or sovereign debt and for trying to support private sector banks to preserve their capital and their capability to finance further growth. 

On his part, Mr Ofori Atta said Ghana was in the middle of an IMF programme, which required the support of Germany such as forming a creditor committee at the Paris club to accelerate the decision-making process and supporting the IMF fund board to enable Ghana to get approval in March 2023.

“Germany has always been strong with their support for us in terms of energy, financial services, and social inclusion and these are all critical components of our growth programme,” he said.

He said Ghana’s debt profile had increased by some 20 percent and it was necessary to look at the concept of debt restructuring and debt forgiveness.

He said Ghana’s international creditors would need to take a decision based on common humanity, understanding, and how to reposition the global framework “so that we can all have resilience.”

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