Transcript

Transcript of IMF Press Briefing on Ghana

May 24, 2023

PARTICIPANTS:

STEPHANE ROUDET

IMF Mission Chief for Ghana

International Monetary Fund

KEN OFORI-ATTA

Minister of Finance

Ghana

ERNEST ADDISON

Governor, Central Bank of Ghana

Ghana

TATIANA MOSSOT

Senior Communications Officer

International Monetary Fund

MS. MOSSOT: Good morning, good afternoon to our viewers around the world and especially in Sub Saharan Africa. Welcome to the IMF Headquarter in Washington, D.C. I’m Tatiana Mossot with the IMF Communications Department, your host for this special press conference on the Executive Board approval of $3 billion U.S. dollars Extended Credit Facility Arrangement for Ghana.

I’m pleased to introduce you to our special guest, Ken Ofori-Atta, Minister of Finance of Ghana who is with us. We will be remotely in Accra with Dr. Ernest Addison, the Governor of Ghana Central Bank, and with us also is Stephane Roudet, the IMF Mission Chief for Ghana. Stephane, the floor is yours.

MR. ROUDET: Thank you, Tatiana and a very good day to all who are joining us today; and, of course, I would like to welcome also Minister Ofori-Atta and Governor Addison to this precedent. I believe we have some excellent news to discuss today with the approval yesterday of a $3 billion-3-year program for Ghana.

As you know Ghana has been facing a severe economic and financial crisis with a debt burden assessed as unsustainable. More specifically, a combination of pre-existing vulnerability and external shocks as the COVID-19 pandemic, Russia’s war in Ukraine have resulted in acute financing pressures, depreciating cedi ), declining international reserves, slowing economic activities, and high inflation.

In response to these difficult circumstances, the Ghanaian authorities have taken decisive steps. Just to give you a few examples, the 2023 budget and the associated revenue reforms were very important first steps towards putting public finances back on the sustainable track. To restore that sustainability, the Government has launched a comprehensive debt restructuring; and the Bank of Ghana has also taken decisive steps to control inflation, and these efforts are already paying off.

These are all essential ingredients to address the current challenges and to boost Ghana’s prospects going forward. Of course, help from the international community is also needed, and the IMF is playing its part. The $3 billion extended credit facility approved by the Board, by our Board yesterday, will support the Government’s efforts to address this crisis and build the foundations for a better and more inclusive future for all Ghanaians. It will also help ease financing constraints, including by unlocking more funding from the rest of the international community.

Ghana’s economic program has three key objectives. The first one is to restore macroeconomic stability. The second one is to ensure the debt is put on a sustainable path; and the third one is to lay the foundations for stronger and more inclusive growth. To reach these objectives, several policy priorities have been laid out by the Government.

First, large and front-loaded measures to bring public finances back on a sustainable path, and this will be done by mobilizing more domestic revenue and by improving the efficiency of public spending. Importantly, and I want to emphasize, that the program does, and will continue to, include efforts to protect the vulnerable. Just to give you a few examples, the 2023 budget has, for example, doubled the level of benefits for the existing targeted cash transfer program, the LEAP, the Living Empowerment Against Poverty program. It has also boosted allocations towards the school feeding program.

Second, to support fiscal adjustment and enhance resilience to shocks, ambitious structural reforms will be implemented. In the areas of tax policy, revenue administration, public financial management, as well as reforms to address the weaknesses in the energy and the cocoa sectors.

Third, and I already referred to that, steps are being taken to bring inflation under control; and the Bank of Ghana has been raising interest rates and has, virtually, eliminated monetary financing of the budget. A flexible exchange rate policy will also be implemented to help rebuild international reserves.

Fourth, measures to preserve financial stability are very central to the program; and, last, but not least, the Government will also be implementing reforms to encourage private investment, higher growth, and job creation.

In conclusion, let me highlight that this program, and policies, and reforms, together with the debt restructuring will help Ghana overcome immediate economic and financing challenges and pave the way for a brighter future for all Ghanaians.

MS. MOSSOT: Thank you, Stephane. Minister, please? I think it’s a special day for you and for your country.

MINISTER OFORI-ATTA: Thank you very much, Tatiana. It is, indeed, a special day; and good afternoon, good morning; and, really, thank you for joining us for this joint press briefing on Ghana’s approved $3 billion extended credit facility of our partners, the International Monetary Fund. A special day, indeed, for Ghana, special day for theFund, and really a signal to our other African countries who are looking to be in this program.

But on behalf of the President, Government, and people of Ghana, I’d like to thank the Board and management of the Fund for their commitment towards a Ghanian cause. Let me extend a special appreciation to the IMF Managing Director for her unwavering support and belief in Ghana’s ambitions and the reform agenda. I’m also, we cannot forget the tireless efforts of Deputy Manager Bo Li for his tireless encouragement offers in the work he did. To the Mission Chief, Mr. Stephane, and the entire Mission team, a big thank you for your efforts and constructive dialogue with the Government as we worked to secure this Fund-supported ECF program. Also, our appreciation to Abebeand Analisa (phonetic); and our office here lead by ED Bijani, Akosah and Sarda (phonetic) for all that they have done.

We do acknowledge, also, the pivotal role of our bilateral partners, especially members of the G20, Common Framework, the Paris Club, the work done by the G7 and, really, the support by India, Saudi [Arabia], China, and Turkey have been really tremendous in bringing us this far. The financial assurances that were delivered last Friday, May 12th, were instrumental in securing yesterday’s Board approval; and we, truly, do thank all of them for that. Clearly, it’s also a signal that a common framework can be made to work and we look forward to just following through.

And, so, we look forward to fruitful engagement of both our bilateral and private creditors in the days ahead as we walk towards achieving the sustainability that will anchor economic stability.

Ghana’s IMF Board approval is far from a magic solution won; and what it is, however, is a crucial first step on the necessary journey of strong reforms, inclusive growth, and relentless pursuit of a growth agenda geared towards restoring our economy to a place of strength, prosperity, and resilience.

Undoubtedly, the economic toll on our people from the effects of the global public crisis cannot be understated. We are, indeed, grateful for the forbearance of all Ghanaians in the wake of the Domestic Debt Exchange Program, which was difficult but, ultimately, a necessary exercise.

It also has impacted our banking institutions, and we look to work with the banks to make sure that we get a financial stability that is required. Ultimately, the debt exchange program, combined with our multi-year focus on growth, fiscal sustainability, and debt sustainability should accelerate our economy (inaudible). We’ve already seen some relative stability in the currency and in inflation thanks to the work, also, by the Central Bank.

Indeed, I think we have to move ahead, and as the good book says, we should forget the former things, we should not dwell on the past and see that new things are being done, and we are ready for that.

The Government of President of Akufo-Addo is acutely aware of the enormous task ahead will be (inaudible)by the momentum and propel Ghana to obtain the staff-level agreement, financing assurance from our bilateral creditors, and Board approval in near-record time to implement the six-month ECF program. We are certainly on the path toward not just recovery but, also, revitalizing our economy.

In that regard, I’m confident that Government will support the Fund, and the collective effort of the Ghanaian people will work through our current challenges and emerge stronger than before. What is being seen is marvelous in our eyes as Ghanaian, and it is a moment of time. Greater things are ahead. We know Ghana can achieve it. We’ve been through this before, and we are ready to ensure that we set a pace that others can also follow.

So, let me thank you all, once again. Also to the Ghanaian people for your forbearance and partnership. God bless us all.

MS. MOSSOT: Thank you, Minister. We will go now to Accra to join Governor of the Central Bank, Dr. Ernest Addison. Dr. Ernest Addison, good afternoon.

GOVERNOR ADDISON: Good afternoon, Tatiana; and hello Stephane and Ken. Greetings from Accra. Let me, first, on the Mission Chief, Stephane and the Executive Board of the IMF for yesterday’s approval of the Government of Ghana’s program request for financial support from the IMF which will serve as a basis for further engagement between Ghana and our development partners.

For those of you who have been following Ghana closely, you all have made it through this journey with us, very difficult and challenging times, especially in 2022, which has also led to a crisis and social implications and could, easily have, you know, eroded the hard-earned stability.

I want to, however, focus my brief remarks on three issues this afternoon. First, from the perspective of the Central Bank and, for that matter, the Government of Ghana. The approved IMF-supported program should not be seen just about the money alone. That is the project support that comes with the approval. While that helps with the current reserves profile for the Central Bank, what matters most is the fact that the program sets out a set of policy and structural reforms that should help Ghana to reset economic policy fundamentals which was dislodged by the crisis over the last year or so.

These deep-seated reforms should re-anchor policy and embed irreversibility in our policy outcomes and ensure that pathways are rebuilt to make our economy more resilient. The second point follows from the first that this is now the time to begin the work. The program approval is just the beginning of the real work of building Ghana later.

And, thirdly, the Executive Board’s approval of the support program yesterday, especially if you look at the timeframe within which Ghana secured this approval, it’s unquestionable the strong Government’s political will and commitment to their reform agenda. The painful sacrifice of Ghanaians, especially through some of the measures, such as the Domestic Debt Exchange, which has also helped us reach these conclusions very quickly. So, we have reached the point where key stakeholders should come through very quickly with their support to give meaning to the catalytic role of the Fund and help build Ghana better.

We see here a clear demonstration of burden sharing, including macro and structural reforms, and the domestic debt restructuring. We’re looking forward to and continuing to count on an expedited process to conclude the remaining negotiations on extending debt restructuring to ensure that Ghana quickly gets the full benefits and complements of these reforms to underpinning the policy, resetting agenda.

On this note, let me once again add my voice to the Minister of Finance to take opportunity to thank the IMF staff and the Executive Board for working with us through these difficult and challenging times, to secure this very important and critical milestone of a Fund-supported program. Let me also thank our key stakeholders, bondholders, and bilateral creditors for their demonstrated commitment to support Ghana. Thank you very much.

MS. MOSSOT: Thank you very much, Governor. Now, we’ll go with journalist questions. There are a lot to be connected from Accra and around the world. I think we have with us Joseph Appiah Dolphyne from Asaase Radio who has a question. Joseph, good afternoon. Are you with us?

MR. DOLPHYNE: Good afternoon.

MS. MOSSOT: Please go ahead.

MR. DOLPHYNE: Yeah. My question is Ghana has relied on the IMF for support 17 times, and the critics say the Fund, the support from the Fund, has never been a solution to their country’s challenges. I would like to know what you make out of this; and then, one, you have promised to focus on reining in inflation and rebuilding Ghana’s foreignreserves. How are you going to do that? Lastly, how will this be done and what will make this support from the IMF different from the previous ones? Thank you very much.

MS. MOSSOT: Thank you very much. I think we’ll start with Stephane first.

MR. ROUDET: Thank you, Joseph, for this question. Look, the first thing I would like to emphasize is that, of course, this program is very much focused on restoring macroeconomic stability, anchoring debt stability, and it will also create the foundations for higher and more inclusive growth. So, I think that’s very important because this will set the stage for a much brighter future for all Ghanaians.

But, now, to your question about the future -- I think it’s important to emphasize also that this is a program that is very rich in its structural component. It includes many reforms that cover large range of sectors, and these reforms will make the economy more resilient to shocks in the future; and this is what really the Government and the IMF are looking for in this program. It’s a program that will make the economy more resilient and more likely to withstand shocks in the future.

MR. MOSSOT: Minister, you wanted to add something to this?

MINISTER OFORI-ATTA: Yes, I could. Thank you very much for that question, and I think it’s one of the major areas of anxiety for Ghanaians, as to what does the 17th time mean and where we’re going to go from there. If you realize the program is anchored by post-COVID program where economic growth, which we developed ourselves; and if you look at the strategies that are in there, the issue of moving revenue from 13 percent of GDP to 18 percent is an important facet of this so that we have the resources to do what we have to do. A strong sense of expenditure and economic bank controls will also be emphasized going forward; and the growth agenda is really strong. How do we create an enabling environment for investment to propel the private sector.

So, I think, it’s that clarity that we have gone to the Fund, enough, and we should use this opportunity as a reset to move forward.

MS. MOSSOT: We have Nii Larte Lartey from Citi FM and Citi TV. Good afternoon. Nii, can you hear us? We can see him. Please go ahead with your question.

MR. LARTEY: I can hear you.

MS. MOSSOT: Thank you. What is your question?

MR. LARTEY: Well, we know that Ghana actually came to the IMF largely because of the country’s debt overhang.

MS. MOSSOT: Nii, we’ll come back to you in a few seconds.

MR. LARTEY: And also it’s excessive borrowing for which reason we lost our assets to the international capital market.

MS. MOSSOT: Okay, did you?

MINISTER OFORI-ATTA: I think --

MR. LARTEY: (Inaudible) There’re already hints that Ghana will be returning to the capital market soon. First, I want to find out from the Finance Minister, why the rush to return today to the international capital market and, also, to the IMF. What is the official position of the Fund, and how concerning is this to, you know, their program in its entirety?

MS. MOSSOT: I think we heard --

MINISTER OFORI-ATTA: I think, Nii, we heard parts and bits of it, but my understanding...

MR. LARTEY: And also my second question has to do with --

MINISTER OFORI-ATTA: (Inaudible) has to be concerned about borrowing and also what you believe would be a precipitation of our return to the international capital markets. On the issue of borrowing, I mean the reason for this program is to bring us down to 55 percent debt to GDP ratio, and that program will hold. Really, in addition to the revenue measures, and there we saw in the budget, and that improving our (inaudible) will give us a resource to move forward, curtailing and managing our expenditures are going to be important. No, there is no rush to go back to international capital market, our expectation is that in managing our expenditure and increasing our revenue, we will have the resources to work. Working towards a capital market is important because we then get our ratings up and make the country more attractive for foreign investors, especially FDI. But rest assured that no one is rushing to international capital markets at this juncture.

MS. MOSSOT: Governor, I think you wanted to react before I go back to Stephane on the Fund question.

GOVERNOR ADDISON: Well, thank you Tatiana. Just to react to the earlier question on our ability to deliver low inflation, and just to remind ourselves that, you know, the problem in Ghana started only in January 2022 and, at the end of 2021, inflation was at 12.6. And within a year, we had seen inflation rise to 54.1 percent, partly because there was a difficulty in financing the budget, the access of the capital markets was not available, which led to, you know, Central Bank accommodation of government. And, as you as aware, we have signed a Memorandum of Understanding not to cede with that going forward. We believe that that would help a great deal in making our monetary policies more effective.

Already you can see that inflation has begun a downward descent. The Monetary Policy Committee has been meeting today, and I think would put out our decisions on that on Monday.

MS. MOSSOT: Thank you. Maxwell Adombila, still in Accra, from Reuters. Good afternoon, Maxwell.

MR. ADOMBILA: Good afternoon, Tatiana, and good afternoon to everybody. My question has to do with the timely release of the 600 –- the first 600 million. Is it the case that there will be -- Ghana needs to meet certain criteria to –- just a second, I will get to the point –- the issue of securing timely restructuring agreements should extend our creditors. Does Ghana need to sign an MOU with its official external of creditors to secure the next 600 million payout from the program? That is, after the first review, there’s one in June and there’s one towards December -- November, December; should we have to sign the MOU before we get the 600 million?

And then on the external debt restructuring, what is the estimate that net present value haircut on that component?

MS. MOSSOT: Thank you very much. Stephane, would you like to start?

MR. ROUDET: Sure. Maxwell, good afternoon, thank you for your questions. You have several ones actually, so let me tackle them in turn. On the first disbursement, there’s no additional conditions, the program has been approved yesterday, and the disbursement is available, the money is available to the Central Bank and to the government.

On the timeline for the restructuring of the external debts, of course, on the external side, you have two components: you have the debt that is held –- that is held by official bilateral creditors. The expectation, I believe, the goal, the objective, of the Ghanian authorities is to reach an understanding with official creditors, indeed, by the time of the first review on the specifics of the terms of the restructuring.

And, of course, you have the second component that has to do with the private sector external debts. And here, I believe the authorities and the advisors are engaging with these commercial creditors also with the goal of trying to advance the discussions rapidly. So, that’s for the timeline on the external debt restructuring.

As –- I believe you also asked, in a way, about the timeline of the first review. So, the first review of the program will be based on an assessment of the quantitative objectives under the programs as of end June. And it will take a few months after that to make this assessment with the goal of bringing the review to the board in November. So, that’s the timeline for the first review of the program.

MS. MOSSOT: Minister, would you like to add something on --

MINISTER OFORI-ATTA: Yes, Maxwell, thank you very much for the question. As Stephane has mentioned, there’s a $600 million release. I’m sure I’ll be working with him to see whether we can get it back tomorrow. And then we move on to there’s six months where there will be another $600 million, and then we have about 5 different tranches over 6 months in the periods moving forward to get to the 3 billion.

With regards to the issue of the negotiations and discussions of commercial and external creditors, we really are, you know, at the beginning of the discussion, and therefore cannot really be specific about what haircuts or how that will end. But so far, discussions have been very cordial, and we hope that the signals given by the fund will also have an accommodation that will suit all parties. Thank you.

MS. MOSSOT: Governor, you wanted to address the same question.

GOVERNOR ADDISON: Well, yes, if I understand what the question was. The criteria for the June assessment would include the zero Central Bank balancing of the budget, as well as an indicator, I believe, on the primary balance. So, these are going to be key in the assessments in June. And that probably will help trigger another disbursement after that assessment.

But, just for your information, we have had a swift advice today to receive the money and valued at, tomorrow, $604 million U.S.

MS. MOSSOT: Thank you. I guess it answered to Maxwell question, second question, which was about the second disbursement. We have Edna Agnes Boakye from Citi News. Her question is, ‘How does the IMF envision the extended credit facility contributing to macroeconomic stability in Ghana, particularly in areas such as inflation control and exchange rate stability?’ Stephane, maybe?

MR. ROUDET: Thank you, thank you for this question. It is really a broad question because it’s a program that is quite comprehensive, both in terms of the composition on the policy front, but also on the structure front. And all of these efforts combined will contribute to macroeconomic stability going forward.

On the inflation side, I believe I will flag two key planks of the program that I have already mentioned. But one is the very substantial and ambitious fiscal consolidation program that the Ghanian government has embarked on. Of course, this will have –- it will help reduce pressures on prices and will contribute to controlling and bringing inflation further down.

And then, of course, the other aspect that I mentioned is the bold steps that have been taken by the Bank of Ghana in raising interest rates and in eliminating monetary financing of the deficit, both policies that are very, very critical to bring inflation down, and that have already starting –- started bearing fruit.

On the reserve side, again, many aspects will contribute to increasing the reserves. Of course, the policies that I just talked about will help improve the external position, it will help contribute to tame the growth of imports, it will help make the economy more competitive, and bring exports higher, all of that will contribute to a more favorable external position which in itself will lead to higher reserves. And of course, there is the impact of the program on the financing side. Financing from the IMF could also –- the financing that will help –- that will be catalyzed with the IMF program from other partners that will all contribute to bolstering the international reserve position in Ghana.

MS. MOSSOT: Minister, would you like to address this Citi News question too?

MINISTER OFORI-ATTA: No, I suspect maybe governor, inflation, and exchange control would be a great place for Governor to chime in on this one.

MS. MOSSOT: Governor, the floor is yours.

GOVERNOR ADDISON: Yes, yes, thank you very much, Minister. I think that Stephane hit the nail on the point. The issue is about resilience, and this is really what I tried to explain in my earlier intervention that, I said the end of 2021, inflation was at 12.6, and within a year it rose to 54.6 because we had had a major challenge with access to financing especially.

And as Stephane said, a major part of this program is focused on fiscal consolidation. As you’re aware, there are new revenue measures which should enhance revenue flows to the budget and therefore reduce the demand for financing. You’ve also heard the implementation of the debt exchange program, so the foreign exchange outflows that are associated with debt service should reduce.

And then the catalytical impact of the IMF flows, which would, you know, also help attract foreign inflows, both direct and then bilateral support. And all of that should help, in a sense, not only bring inflation down, but also help with exchange rate stability.

MS. MOSSOT: Thank you, Governor. So, now we have a question from Francis Ntow from Ghana News Agency. Francis, are you with us? Francis? Francis, who is in Accra.

MR. NTOW: Yeah, I muted myself, sorry.

MS. MOSSOT: Good afternoon.

MR. NTOW: Hello, good afternoon. I guess you can hear me?

MS. MOSSOT: Yes, we can hear you. Please go ahead with your question.

MR. NTOW: Great. So, we’ve seen the government introducing various revenue measures. Since the economic action begun, there have been various calls for some expenditure rationalization, which the major call the government to reduce the size of its current government. I would like to know from the Fund, would the reduction of the number of –- would the reduction in the size of government have an impact on the current program that the government is seeking for?

And I also want to find out from the Finance Minister, I already -– we’ve seen some banks recording losses, what exactly is the government going to do to ensure that banks are supported enough to provide funds to businesses? And how much has the stability fund been able to get so far?

And the last will be, the Fund –- the 600 million that’s coming in tomorrow as the Bank of Ghana Governor stated. What exactly is this Fund, or this money, going to be used for? Thank you.

MS. MOSSOT: Thank you, Francis Ntow from the Ghana Broadcast News Agency. Who would like to address his several questions? He has several ones. Stephane?

MR. ROUDET: I can take a crack at it. And thank you, Francis. I am not sure I understood fully the first question, but I heard you talking about revenue measures, and also reducing the size of the government, and so, I think what I’ll say on that is that indeed, the program is quite ambitious in terms of putting the government finances on the sound footing going forward and ensuring sustainability on that front.

And there are really two key components to this: one, is the one that you were referring to, to these revenue measures. The program is, again, is ambitious on that front. The government has set for itself the objective of increasing the ratio of revenues that are raised domestically substantially over the next few years. And this is very important, of course, to contribute to the reduction in the size of the deficit.

But more generally, going beyond that, it is also an important goal to bring the revenue ratio in Ghana closer to peers in the region, and this will contribute to making public finances much more resilient to shocks going forward. It will also create space for the government to spend more on priority spending, on helping the most vulnerable, and implementing its vision for economic development and having more expenditure focus on priority spending and on infrastructure going forward.

On the spending side, again, on the spending side, reduction spending is, I would say, what is the most important is to –- for the government to be able to provide better services at a lower cost. To make government expenditure more efficient. And this is, again, an objective that the government has set for itself, and there is –- there are a number of reforms under the program particularly on public financial management, enhancing fiscal transparency, all of those aspects that the Minister mentioned earlier in the advance that are also very important.

I will perhaps let the Minister talk about the –- about support to banks, and there was a question more specific to the Fund, I believe, at the end, but I cannot remember.

MS. MOSSOT: We’ll go back to it. Minister, would you like to address this question?

MINISTER OFORI-ATTA: Thank you very much, Francis, and very, very good questions. With regards to the banks, yes, we went through the DDEP Program, and we have all seen the effect on the banking sector, and therefore the structure of the Ghana Financial Stability Fund, which we intend to fund with up to $1.5 billion. $250 million from the World Bank and government to contribute $500 million as we still speak to our development partners for them to participate in that.

But the exercise, as you know, was really crucial to be able to reduce the level of interest that we are paying to support our debt. So yes, the World Bank should hopefully, in the third quarter, be able to bring that initial support going forward.

As you know, we are running a budget deficit. We are also agreeing for zero financing. For that to continue to support programs and that we have is where the $600 million will be deployed. I think going forward, the issue of efficiency of government and efficiency of services to the people are going to be key, and therefore finding ways of ensuring that we are efficient in our deployment that we have. So that’s going to be key.

I think for all of us in Ghana to really internalize that it’s a new era in regards to our own behavior, reengineering the type of imports that we have, moving towards food security, so the importation of rice, and poultry, and potatoes, et cetera, are brought down and we produce those ourselves. That really will signal a new way forward and will increase the resilience and sustainability of the program.

MS. MOSSOT: Thank you, Minister. I think the question on the Fund, Stephane, we will follow-up with Francis later. We had a question from Edward Niako from Ghana Broadcasting Corporation. ‘May I know if the IMF program will lead to a cut in social programs such as LEAP,capitation grant and the fee SHS?’ Minister, would you like to address this question?

MINISTER OFORI-ATTA: Thank you very much, Edward, and you heard Stephane on this issue. They have been ensuring that we protect the vulnerable. It’s very clear in the program. So, I think we have increased the resource envelope for the school feeding program, we are doubling, I think, the LEAP program to ensure that the welfare support continues. So, no, we should not worry about that, and you have always heard the President being very clear about ensuring the lives and livelihood and that spirit will continue.

MS. MOSSOT: And would you like to complete?

GOVERNOR ADDISON: Well, no, I'll just add that as the Minister said, the ensuring social protection is a key objective of the program. The budget, 2023 budgets has already taken important steps in this regard to, not only to protect, but I would say to bolster support to the vulnerable through the most effective and the most targeted programs.

But I'd say also, and I would encourage everyone to go and look at the Staff Report that has been published yesterday. It includes a lot of analysis and descriptions of how the program will go about monitoring these aspects and ensuring that in the face of what could be difficult policies to implement on the fiscal consolidation front, these are implemented in a way that is the least disruptive as possible. And by not only protecting, but increasing the coverage of the effective social programs.

MS. MOSSOT: We have another question from Bloomberg News, Moses Mozart Dzawu, are you with us, Moses? I don't know if he's connected. Moses, good afternoon.

MR. DZAWU: Good afternoon. Thank you. Thank you for the opportunity. Yeah. My first question, the IMF has said the Central Bank has to do more in terms of increasing rates. We'd just like to know how that would be implemented considering that the rates are already high, not our (inaudible). My second question is, at what sort of debt relief do we expect from the bilateral creditors? Are we going to be resettling of debt, or this debt forgiveness, principal haircut of and/or interest haircut? And directly linked to that, what about the (inaudible) Project? What sort of debt relief are working to get in from this group of investment? Thank you.

MS. MOSSOT: Governor, I would like to know if you were able to hear Moses very well, because I think this question was mostly for Central Bank.

GOVERNOR ADDISON: Yes. Tatiana, I heard him very well. I think he misunderstood what the IMF said. I think the IMF State Bank was that we have to keep a tight monitor policy stance until we assure that inflation is firmly on a downward path. So, it doesn't necessarily mean that we would have to be increasing our policy rate. But then on the issue of the impact of the debt exchange on the banks, I wanted to say a few things.

First, to say that banks are very liquid. We don't see that the banks are having any difficulty with liquidity. And in any case, the Bank of Ghana stands ready to provide liquidity for any banks that may have the future liquidity issues. And also to add that the main impact of the debt exchange was to reduce the capital buffers of the banks. So, what we have done is to give them some regulatory forbearance. We reduce the capital conservation buffer of 3 percent. And that reduces the capital (adequacy ratio from 13 to 10 percent. And we've given them a period of three years to rebuild their capital buffers.

So, we think that the banks will be fine. Our shareholders will systematically rebuild these capital buffers and the Government, and the shareholder would also find resources to rebuild capital buffers of the state-owned banks. Thanks.

MS. MOSSOT: Thank you. Ken Ofori-Atta. You have a question from Kemi Osukoya, from Africa Bazaar Magazine. Are you connected, good afternoon, or good morning? I -- I guess you are in the U.S., good morning.

Mrs. Kemi Osukoya: Good morning. Can you hear me?

MR. MOSSOT: Yes, we can hear you.

Mrs. Kemi Osukoya: Yeah. Thank you. Good morning, Mr. Finance Minister, and Mr. Governor. Thank you for taking my questions. I wanted to find out that given what is going on, U.S. dollar is known as the global currency, and I was wondering if you have any concerns regarding the inflation in the U.S. and also the Federal Reserve interest rate rise How that will impact your new agenda to strengthen, buffer and attract foreign investments together.

MS. MOSSOT: Okay. I'm sorry. We can't hear you very well. I guess we will have to take your question in few minutes. Before going back to your question, we'll go with Joy FM, George Wiafe. George, are you with us, George? You're muted, I think--

MR. WIAFE: Tatiana, can you hear me?

MS. MOSSOT: Thank you. Now, we can hear you. Yes.

MR. WIAFE: Yeah, some quick questions here. Some people are worried about the time taken to approve Ghana's program. And the fear and the concern that the process the was rushed. Could it expose the program to any shocks going forward? And that's the clarity I want to get as well. And also, to the mission chief, in terms of the conditionalities, if Ghana should bridge meeting of any of the critical benchmarks, would that affect fresh disbursement to the country as well in terms of, even if it's one of them, would that impact or get an additional funding from the IMF. And also the final one to the Ministers as well, in terms of discussions, the World Bank is coming on board with some support. What about the other donor partners as well?

What is their commitment to this program in terms of the financing assurance?

MS. MOSSOT: Thank you, George. Minister, or Stephane? Minister, I see that you're looking at Stephane, so --

MINISTER OFORI-ATTA: No, no, I could, I mean, George thank you very much. And really, I think Kemi’s issue was more of an issue of contagion effect. As U.S. rates go up, how does a trickle into our economy? That generally affects all of us. Once rates go up, the weaknesses in the banking system also affects credit to Africa, to Ghana, et cetera. So, those are all things that then becomes a responsibility of Ghana, other Africa countries to reduce imports and become more sustainable in the way in which we stop importing some 70 billion worth of food onto the continent. If we change that equation, we'll be able to shield ourselves better.

George, three questions on the issue of being apprehensive about how countries such as Zambia, Chad and Ethiopia have not been able to go through, bringing much distress to the economies. And the way in which Ghana has been able to work as seriously with the Fund and the partners to have this landmark decision yesterday. Really should be considered an achievement instead of saying that it has been rushed. The program, as Stefan said, is rich and solid. And I really would encourage you to read the documents for you to know that.

I think when we are able to do good work, we should be courageous enough to enjoy and savor the achievement. And not turn it into a negative. And with regards to the benchmark, the benchmarks are clear. It is up to us in the same vein in which we were able to achieve the agreement yesterday and approval yesterday, and that we also work hard to make sure that the benchmarks are met as we go forward.

On the issue of the Financial Stability Fund, yes, the World Bank has committed. We are still in negotiations of other development partners to see the role in that. And we are confident that the manner in which we all have managed, and the process so far will also make some major breakthroughs going forward. So, thank you.

MS. MOSSOT: Stephane?

MR. ROUDET: George, on, on your three -- good afternoon, first of all. But on your three points, I will also respond to you in a very, very positive and very optimistic manner. I think today is we have a lot of reason to be happy and to celebrate with the program approval. I will just remind you that it took a few months to achieve an agreement and to reach the Staff Level Agreement, this was already very, very good news. But I think today, having the program approval in just a few months after the Staff Level Agreement, this is also something that is extremely positive. Positive for Ghana, but I believe positive for the countries that may have to come and seek that relief under the Common Framework going forward.

On your question about the structural benchmarks, today I am extremely positive. What I see is a very strong commitment from the authorities, and I have no reason to believe that that the program will not be fully implemented going forward. And we are here and standing by the authorities to have them do so.

And then finally, I believe the program approval is also an extremely good news with respect to your third question, which is about World Bank and other partners' support, I think it sends a very strong signal to the international community and other international organizations that the program is in place; that the authorities are committed, and it can only help catalyze additional financing for Ghana.

MS. MOSSOT: We have two last questions. One from Nabil Ahmed Rufai, CGTN, and another one for from Benjamin Taiwa (phonetic), Class 91.3 FM in Ghana. Nabil Ahmed, please, can you share your questions? Good afternoon.

MR. AHMED: Hello. Good afternoon. Thank you so much. So, I just have two brief questions, and it has to do with the fact that Ghana money to get financial assurances from the Bilateral Creditors Group that's co-chaired by China and France. Now --

MS. MOSSOT: Nabil?

MR. AHMED: -- with external debts. Yes. Can you hear me?

MS. MOSSOT: Yes. Now, we can hear you.

MR. AHMED: Yes. I just want to find out whether it is clear what the debt restructuring agreement with external creditors look like at the moment. And has there been any progress on negotiations with Euro bond holders to restructure the debt owed to private investors? Thank you.

MS. MOSSOT: Thank you. And the other question is from Benjamin Taiwa from class 91.3 FM in Accra. Are you with us, Benjamin? I think you're muted. Class FM? Okay. We'll start with Nabil Ahmed question, gentlemen, if you want.

MINISTER OFORI-ATTA: Nabil, thank you very much. indeed. I think last Friday there was actually quite a seminal moment for the whole Common Framework G20 expedition, we would say, because it has been really difficult for a lot of countries. The Co-Chairs by France and China and the discussions that went on for the assurances to be given on Friday were timely, well thought out, and also is an indication of how we may be able to work with the common framework more effectively for other countries that are coming up.

With regards to the external creditors and the European investors, as I mentioned earlier, earlier we've started those discussions and given the signaling that has come from the Fund, that would sort of influence the environment and the discourse. But there's a lot of optimism about exactly where Ghana is going, and that if any country can do it, Ghana can do it. I understand that even at the Board meeting yesterday, there was actually a spontaneous clapping when it was approved. So, that is how strong people are feeling about our country, and that's because we have done it before, as you know, before Covid we were at about 7 percent growth. Inflation was down to single digits, et cetera and I think we were on a good trajectory until the incidents that have been quite cataclysmic for the whole world.

So, there's excitement going forward. We are confident that we'll fulfill the structural targets that we have set. And we really are calling all Ghanaians to join in this effort to make it happen.

MS. MOSSOT: We are almost at the end of this press conference, but I would like to try to go to Accra again with Class 91.3 FM. Are you, Benjamin, are you online with us, please? Benjamin, can you hear us? Yes, they are. Good afternoon. Good afternoon. Benjamin, can you hear us? It looks like it's complicated for Class FM to connect. I would like to, before we close this special press --

MR. TAIWA: Hello? Hello.

MS. MOSSOT: -- like to give you --

MR. TAIWA: Can you hear me?

MS. MOSSOT: Benjamin, we can hear you. It's a little bit --

MR. TAIWA: Okay, so --

MS. MOSSOT: Please go ahead.

MR. TAIWA: Good. My question is directed to Stephane. Can you hear me?

MS. MOSSOT: Yes, we can hear you.

MR. TAIWA: Right. My question is directed to Stephane and IMF. And the first, I want to find out considering Ghana's history of overborrowing and Government's reckless expenditure, coupled with a lot of figures that the IMF will mention that the IMF will contract these figures. How confident is the IMF in Ghana's ability to improve the necessary reforms to address the root cause of this debt crisis and to achieve a long-term economic stability with what specific conditions and measures as the IMF set forth as part of the bailout package? And how will that impact on Ghana's economy, particularly in terms of social welfare and Government spending? That is my first question.

My second question has to do with what mechanisms or safeguards are in place to prevent the reoccurrence of the unsustainable debt levels in the near future, given the volatility of global market and the potential for external shocks. What contingency plans or support will the IMF provide to Ghana to help mitigate risk and ensure the sustainability of its economic recovery efforts?

MS. MOSSOT: Thank you very much, Benjamin. Stephane, you will address this Last questions.

MR. ROUDET: Benjamin, thank you for your questions. I will tackle all of them at once because they're very much related in a way. I think you asking what makes us at the IMF confident, or what makes us confident at the current juncture is the strength of the program that the Government and the authorities in general have put together and that the IMF is going to support. And the strength of the program is true on two fronts. First, on the policies that will be implemented in the program. I talked about the revenue side, the expenditure side before these policies are very sound policies. And we have mechanisms to monitor the implementation of the program going forward. And that makes us all quite confident about how policies are going to be conducted over the next few years.

But I would say also, and repeat again, that the program is very rich on the structural side. And what that means is that the Government is very committed to implement reforms that will help improve policy frameworks going forward, making sure that these improvements that we are going to see and that we are seeing already today are embedded in frameworks that are lasting. And that will continue to last well past the end of this program. So, on both counts very confident and optimistic.

MS. MOSSOT: Thank you very much. It's already the end of this press conference. I know that you were allowed to be connected and to have many questions. Just a reminder that the, the presser will be re rebroadcasted in its entirety on the imf.org, and we will alert all the media as soon as ready.

I would like to thank Minister Ofori-Atta, Governor Addison, who was remotely in Accra, and you, Stephane Roudet, the mission chief for being with us. I'm pretty sure that the next mission will be a success too in June, Stephane, is that right?

MR. ROUDET: Yes, of course. Very, very, very optimistic.

MS. MOSSOT: Thank you very much. Thank you, Minister. Thank you, Governor for being with us. And thank you all the media for being connected today.

* * * * *

CERTIFICATE OF NOTARY PUBLIC

I, Carleton J. Anderson, III do hereby certify that the forgoing electronic file when originally transmitted was reduced to text at my direction; that said transcript is a true record of the proceedings therein referenced; that I am neither counsel for, related to, nor employed by any of the parties to the action in which these proceedings were taken; and, furthermore, that I am neither a relative or employee of any attorney or counsel employed by the parties hereto, nor financially or otherwise interested in the outcome of this action.

Carleton J. Anderson, III

(Signature and Seal on File)

Notary Public in and for the Commonwealth of Virginia

Commission No. 351998

Expires: November 30, 2024