On Friday, February 3, President Nana Addo Dankwa Akufo-Addo requested Germany to “push” China, an ad hoc member of the Paris Club, to help Ghana’s debt restructuring initiatives.
When the German Finance Minister, Christian Lindner, visited the President at Jubilee House in Accra, the President made the call.
Prior to receiving assistance from his government, Mr. Krull stated in an interview with Joy News that Ghana must put in place a number of crucial steps.
“First of all, we insist that those measures that can be taken here in this country have to be taken. The second condition is that, yes, we are willing to take our share of responsibility as one of the major bilateral donors to Ghana.
“Let me point to three elements. The biggest loss maker in Ghana is the energy sector. In this sector alone, each year, $1.5 billion in new debt is piled up. So if that is not solved, and you ask the IMF for $10 billion, you still will not solve the problem in the medium term.
“So there has to be an answer in Ghana to the 50% technical and non-technical losses in the energy sector. If that is not resolved, I don’t see how we can help find a sustainable solution for the financial problems of the country.”
Mr Krull added “the second part is on the other side of the budget and that is the revenues. Ghana has the lowest one of the lowest tax to GDP ratios, not even 13%. So we have been cooperating with the local authorities and setting up a very smart system of property tax collection. So I think that is an important way forward and this has to be done and processes and decision-making have to be faster to meet the goals, to be able to meet the targets that have been agreed with the IMF”.
The Finance Minister, Ken Ofori-Atta, on Thursday, disclosed that the government’s planned high-level meeting with Chinese creditors over Ghana’s debt restructuring has been postponed to late March 2023.
According to him, this is due to the upcoming National People’s Congress of China which is scheduled for early March.
About $1.7 billion of Ghana’s $5.5 billion in bilateral debt is held by China and its agencies, and because of the specialized nature of their lending windows, Ghana is unable to include them in the model used to negotiate with G20 and Paris Club members.
