Growing concerns have been raised that the nation's multilateral bailout of US$3 billion may be delayed as China's protracted negotiating tactics start to have an impact on the economy, according to analysts.
The International Monetary Fund (IMF) board is scheduled to meet in April for the annual spring meetings. As a result, China has postponed its anticipated meeting with Ghana until late March, which has policymakers on edge as they prepare for the possibility of a protracted negotiation that lasts all the way into April.
Experts warn the country's efforts to get an IMF agreement may be derailed by the fact that China accounts for nearly 30% of the US$8.5 billion in external debt, which might have disastrous effects on the economy.
Since last year, Ghana's economy has encountered significant difficulties, with its debt reaching GH575 billion and accounting for more than 90% of the gross domestic product (GDP).
In July 2022, the government formally requested a US$3 billion rescue program from the IMF to salvage the failing economy.
The government and the fund established a staff-level agreement in December 2022; however, before it can access the $3 billion in financing, the board must still give its consent.
Board-level approval, however, is contingent on the nation's capacity to restructure its domestic and foreign debt.
Stakeholders fiercely opposed a domestic debt swap scheme that was unveiled in December. Yet, the administration was only able to obtain an agreement with more than 80% of the population after significant consideration.
So, the restructuring of the nation's foreign debt is all that is left.
As of now, the major creditors of the nation, including the Paris Club, the US government, and the German government, have all signaled a readiness to accept some sort of debt restructuring.
Analysts and economic observers are concerned that the cedi would suffer as a result of China exercising its negotiating power because the local currency is already showing indications of instability.
China is the greatest obstacle.
Daniel Krull, the German ambassador to Ghana, urged Ghanaians with close commercial links to China to use their connections to persuade China to meet with Ghana's other bilateral creditors and come to an agreement on a package to aid Ghana out of its present economic crisis.
"The clock is ticking." Timing is of the essence. "The IMF deal will be challenging without consent from Ghana's bilateral creditors," he said.
The German Ambassador also urged Ghanaian legislators who were in contact with China to persuade China to meet with Ghana's other bilateral creditors and finalize agreements to support Ghana's return to its previous path of economic growth.
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