“So, the IMF’s Board approved a three-year-$3-billion Fund-supported ECF arrangement in May 2023. US$600 million was disbursed immediately, and the rest is expected to be dispersed in tranches every six months following programme reviews”, she told journalists when asked if Ghana was on schedule with its debt restructuring programme and under what conditions would the Fund withhold the second disbursement, which is due in later this year.

The bailout was made possible after Ghana’s official creditor committee, under the G20 common framework, provided the necessary financing assurances in May 2023.

The programme has three key objectives – restoring macroeconomic stability, ensuring debt sustainability, and laying the foundations for higher and more inclusive growth.

It includes wide-ranging reforms to build resilience while protecting the most vulnerable.

In terms of the next steps on debt restructuring, Ms Kozack said “they are for the official creditor committee to agree with the authorities on specific modalities of debt relief and for the authorities to continue to engage with their external private creditors for relief on their external debt”.

In the meantime, she noted that the “government is finalising the restructuring of its domestic debt”, noting: “A staff team visited Accra from June 8th to 15th, as part of the regular technical programme engagement”.

“The formal first review mission will take place in the fall”.

In addition to Ghana, Ms Kozack also spoke about the Fund’s activities in some West African countries.

Starting with Nigeria, she said, “I can give you an update on where we stand. So, in Nigeria, the most recent Article IV consultation was concluded on February 6, 2023. IMF staff has been engaging closely with the transition team, elaborating on the IMF’s policy recommendations, and providing policy advice if requested. The IMF welcomes the recent removal of fuel subsidies and the unification of the exchange rate regime”.

“Increasing well-targeted social spending will be critical to mitigate the impact of the removal of fuel subsidies on the most vulnerable. And strengthening revenue mobilisation through tax administration reforms is also essential to create fiscal space, reduce vulnerabilities, and put public debt on a sound footing”.

“As to inflation, we do expect inflation to increase in the coming months. And as a result – or because of that, fiscal and monetary policy tightening, including reducing Central Bank financing of government fiscal deficits are needed to prevent a further escalation of inflation. So, that’s on Nigeria”, she said.

With respect to Senegal, she continued: “I can also give you a similar update. On June 26th, 2023 – so just recently – the Executive Board approved an ECF – extended credit facility – and an EFF in the amount of $1.5 billion US. This blend program is aimed at helping Senegal’s protracted balance of payments challenges, as well as addressing macroeconomic imbalances”.

“As to the policy priorities under the EFF/ECF programme, they include reducing debt vulnerabilities by embarking on a fiscal consolidation path, strengthening public sector governance and AML/CFT, fostering a more inclusive and private-sector-led growth”.

“And I should just emphasize here that with respect to fiscal consolidation, there is two points that we would emphasise. One is the importance of revenue mobilisation as part of the fiscal consolidation effort, and the importance of phasing out energy subsidies while protecting the most vulnerable”.

“In addition to the ECF/EFF blend, our Executive Board also approved a $324-million resilience and sustainability facility, which will support Senegal’s climate change mitigation objectives, accelerate its policies to adapt to climate change, and help integrate climate change considerations into the budget process. That is the update on those two countries”.

“And then on debt – stepping back on the issue of debt, we do know, of course – and we have talked, I think, many times in this room about the challenges of debt globally. We have many, particularly in our low-income and vulnerable countries, at or near debt distress. And for many of these countries, they require a debt restructuring or debt treatment. The G20’s common framework has been delivering on debt restructuring cases, such as the ones that you have mentioned, Chad, Ghana, and Zambia. And also, debt restructuring has been proceeding in countries outside of the common framework, such as Sri Lanka. And creditor coordination is progressing”.

“Of course, we recognise that the debt restructuring process needs to accelerate, it needs to be predictable, it needs to be timely, and it needs to provide breathing space to debtor countries through debt suspension during negotiations. To help accelerate the debt restructuring process, the IMF, along with the World Bank and India as G20 Chair, have initiated the Global Sovereign Debt Roundtable. We had a first meeting in February that brought together, for the first time, traditional Paris Club creditors, non-Paris Club official creditors, such as China, India, and Saudi Arabia, as well as the private sector creditors, and, very importantly, debtor countries”.

“There was an April 12th meeting of the GSDR, as we call it – Global Sovereign Debt Roundtable – that resulted in some tangible progress. And I should emphasize here that the GSDR is focusing on issues of process, not specific country cases. Specific country cases are being dealt with in the official creditor committees and in the negotiations between creditor and debtor. The GSDR is aiming to solve procedural and process-related issues. So, there was tangible progress in April at the meeting, and that tangible progress covered support for efforts to improve information sharing, greater clarity on the role of MDBs in the provision of net positive financing flows, and agreement on further work on comparability of treatment”.

“A technical group meeting took place on June 9th to deepen the work on some of these technical issues, such as cutoff dates and the use of state contingent instruments. On June 15th, there was a workshop on comparability of treatment. The GSDR deputies met on June 30th. In September, there will be a workshop on domestic debt restructuring under the aegis of the GSDR. And in parallel, there are a number of other meetings of technical groups and deputies. And finally, the next meeting of principals will take place during the annual meetings in Marrakesh in October”.