Terkper Leads Gov’t Team To Storm IMF/World Bank Annual Meetings
Finance Minister, Seth Terkper is in Washington as head of a government delegation attending the IMF/World Bank Annual Meetings. The delegation, which includes Governor of the Central Bank, Dr. Abdul-Nashiru Issahaku and his key staff, officials of the Finance Ministry and Chairman of the Finance Committee of Parliament, James Klutse Avedzi is scheduled to sign a loan agreement for the “Expansion and Development of Existing High Schools Project” with Kuwait Fund for Arab Economic Development.
A statement issued by the Finance Ministry noted that Ghana’s delegates will participate in the African Caucus Meeting with World Bank President Jim Yong Kim, as well as the African Caucus Meeting with IMF Managing Director, Christian Lagarde. The team is also expected to hold a side meeting with IMF Deputy Managing Director, Tao Zhang.
The meeting which opens which officially ends on October 14, 2016 creates a platform for lobbying and frank discussions on global economic trends, impact of ongoing programmes of the Bretton Woods institutions as well as common agreements on solutions.
Aside the obligatory meetings with the IMF and the World Bank, the delegation will hold bilateral discussions with other partner countries, financial institutions and private sector investors.
Other meetings they would attend include the G24 Deputies Meetings and a closed door meeting of Finance Ministers and Central Bank Governors of Sub-Saharan African countries with David Owen, Ag. Director for African Department on the Regional Economic Developments
The delegation is also billed to meet the Commonwealth Secretary General, Her Excellency Patricia Scotland and attend the Commonwealth Finance Ministers Meeting on the sidelines of the Annual meetings.
Ghana’s participation in this year’s IMF/World Bank AGM comes at a time the country is receiving positive ratings on the economy. Last week, the IMF Board approved the disbursement of another tranche of $116 million after the third review of the Extended Credit Facility. The funds expected in the country this week are expected to support Ghana’s balance of payment and together with proceeds of the cocoa syndicated loans shore up the cedi.
Skeptics had been anticipating some difficulties after government decided review its zero financing policy. But the IMF board expressed satisfaction after assurances by government to deal with pending issues including the Amended Bank of Ghana Act, Government fiscal data for last year, restructuring of State Owed Organization’s debts and dealing with some troubled banks in the country.
Last week, International Credit Rating Agency, MOODY’s revised the outlook on Ghana’s Long Term Bond Ratings from Negative to Stable at B31.
Other positive macroeconomic and fiscal indicators that reflected in the oversubscription of the $750m Eurobond US$750m and priced competitively gives the Finance Minister and his delegation a comfortable position to negotiate.
Last month, government succeeded in signing an agreement with some local banks to restructure legacy debts of State Owned Enterprises in the energy sector, particularly the Volta River Authority’s debt as well as those of the Tema Oil Refinery (TOR) and Bulk Oil Distributing Companies
The initiative targets about half of GH₵2.2 billion of the total energy sector debt of GH₵4.4 billion being paid over a period of three to five years.
The Policy is driven by the bold decision to introduce energy sector levies: Energy Debt Recovery Levy, Public Lighting levy, Price Stabilization and Recovery Levy and the National Electrification Scheme Levy; backed by the Energy Sector Levies Act.
Under the VRA agreement, key players including ECOBANK Ghana Limited, Stanbic Bank Ghana limited and Standard Chartered Bank Limited are to see to the restructuring of approximately half of the debt on the VRA’s balance sheet, an upfront payment of GH₵250 million has been made.
He explained that the agreement would also see a reduction in the average interest rate on the debt from 30 per cent to 22 per cent, and a reduction in the interest on foreign currency component of the VRA debt from 11 to 8.5 per cent, which could result in savings of about GH₵ 350 million.
The Board of Governors of the World Bank Group (WBG) and the Boards of Governors of the International Monetary Fund (IMF) normally meet once a year to discuss the work of their respective institutions. The Annual Meetings bring together central bankers, ministers of finance and development, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness. Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial system.