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China must join Ghana debt restructuring effort soon, Germany's Lindner says

Published 02/03/2023, 01:17 PM
Updated 02/03/2023, 01:32 PM
© Reuters.

By Christian Akorlie and Cooper Inveen

ACCRA (Reuters) - Germany's finance minister singled out China during a visit to Ghana on Friday, as he called on countries that have lent to the embattled West African nation to form a creditor committee quickly to help it restructure its debt.

"I would like to call on all creditors to join the efforts as swiftly as possible," Christian Lindner said in a news conference with his Ghanaian counterpart Ken Ofori-Atta.

"And, to be frank, I remind China of its responsibilities as a very important bilateral creditor of Ghana," he said, adding that he had done so "on the international level" at International Monetary Fund (IMF) meetings in October 2022.

Ghana, which is struggling with its worst economic crisis in a generation, secured a staff-level agreement with the IMF in December for a $3 billion loan, but the money's approval is contingent on it restructuring its debt of 467.4 billion cedis ($39 billion).

In January, Reuters reported exclusively that Ghana had requested a bilateral debt restructuring under the Common Framework, a platform set up by the Group of 20 major economies during the COVID-19 pandemic to bring China and other newer creditor nations into existing debt relief processes.

Western leaders have repeatedly criticised China for delaying developing country debt restructurings, which it disputes.

"Germany is being true partners" in helping Ghana through the debt restructuring process in "an accelerated way," Ofori-Atta told reporters.

Ghana, which is rich in gold, cocoa and oil, owed about $13 billion in Eurobonds and $4 billion in bilateral loans in September 2022, of which $1.7 billion is owed to China, according to the International Institute of Finance.

"Ghana needs to return as fast as possible to the international financial markets. Ghana should keep its credibility," Lindner said.

© Reuters. FILE PHOTO: Free Democratic Party (FDP) leader and German Finance Minister Christian Lindner speaks during the traditional FDP Epiphany meeting in Stuttgart, Germany, January 6, 2023. REUTERS/Andreas Gebert

The German finance minister added that Ghana was planning to ask the European Union to contribute to a financial stability fund designed to support banks as they take a haircut on domestic government bonds.

($1 = 12.0000 Ghanaian cedi)

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