China assures Ghana of support in servicing debt relief

The Finance Minister of China, Mr. Liu Kun says his country has confidence in the management of the Ghanaian economy, and that his country felt a responsibility to be of help as Ghana seeks debt servicing relief.

At a meeting in Beijing with Ghana’s Finance Minister Ken Ofori-Atta last week, Mr. Kun said the Chinese authorities “have confidence in Ghana’s economic management and its long term economic viability.”

Mr. Kun said he wanted to ensure that Ghana’s external debt treatment request was considered expeditiously and was thus accompanied to the meeting with Mr. Ofori-Atta by a high level delegation including Mr. Wu Fuli, Chairman of China Exim-Bank.

Minister Kun said: “We know that these are short-term challenges which we, as responsible creditors, remain committed to resolving.”

“The long standing and prosperous relationship between Ghana and China imposes on us a responsibility to help,” the Chinese Finance minister added.

He said that just like other African countries, Ghana was facing economic difficulties from a once in a lifetime pandemic, geopolitical tensions and interest rates hikes in advanced countries with a contagion effect on developing countries.

This week, all eyes are on Ghana’s parliament which will consider three key revenue measures whose approval is expected to rake in ghc4.4 billion in domestic revenues. It is one of the major actions on the part of Ghana, critical to trigger IMF Executive Board approval of a $3 billion dollar facility for the country to ease its current economic difficulties.

The Chinese officials committed to help Ghana resolve the current short-term liquidity challenges and continue to support Ghana’s medium and long-term development aspirations.

They said China believed in promoting debt sustainability and sustainable development, and would advocate for more concessional and grant funding for Ghana, especially at this time.

“Ghana needs more concessional and grant fund from creditors,” said Mr. Zhang Wencai, Vice President of China Exim bank, adding that “the Multilateral Banks should therefore do more for Ghana.”

Ofori-Atta congratulated the Mr. Liu Kun on his reappointment as Minister for Finance following the recently-ended National People’s Congress and thanked the Chinese authorities for participating in the G20 Creditor Committee meeting on Tuesday 21st March, 2023. He indicated that this was a sign of China’s show of leadership in the global financial ecosystem, and an affirmation of their support for Ghana.

Other Chinese officials who met Mr. Ofori-Atta were Mr. Deng Li, Vice Minister of Foreign Affairs; Mr. Li Fei, Vice Minister of Commerce; Mr. Wang Weidong of the China Development Bank (CDB), Mr. Yang Haitao, General Manager of the International Commercial Bank of China (ICBC), and Mr Luo Zhaohui, Chairman of the China International Development Cooperation Agency (CIDCA).

Mr. Ofori-Atta said Ghana had made significant progress in its discussions for debt treatment with the Paris Club and other bilateral creditors, under the under the G20 Common Framework.

The Paris Club had therefore agreed to form the Official Creditor Committee (OCC) and deliver financing assurances to the IMF soon in order to clear the path for its executive board’s approval of Ghana’s programme by early May.

He also requested China to Co-chair the Official Creditor Committee.

Minister Kun further stated that, they would hope that Multilateral and Commercial creditors will also fully participate in the interest of burden sharing.