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Ghana presents ‘working proposal’ for debt restructuring— IMF sources

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West African country, Ghana has made a major move at resolving its debt crisis as the country has presented debt restructuring proposal to its creditors.

According to sources quoted by Reuters, a “working proposal” has been submitted to help the country escape its worst economic crisis in a generation.

One of the sources revealed that the proposal was a first attempt to engage the official creditor committee after its formation in May. It should be recalled that the Paris Club last month announced that official sector of creditors of Ghana had formed a committee co-chaired by China and France for debt restructuring talks.

The plan is to end restructuring of domestic debt before turning to negotiations with its official bilateral creditors and international bondholders, a government official said.

Ghana is one of several cash-strapped countries facing unprecedented delays in getting bailouts as China, its biggest bilateral creditor with about $1.7 billion of debt and Western economies disagree over how debt relief should be structured.

The first formal review of the programme will hold in the coming months as an IMF team will visit Ghana between 8th and 15th of June.

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Ghana, official creditors’ MOU close— IMF

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As stated by its Managing Director, Kristalina Georgieva, on Monday, Ghana’s signing of a memorandum of understanding with its official creditors is close.

A major step forward in Ghana’s journey for debt relief as it navigates its way out of the worst economic crisis in a generation, the West African nation struck an agreement in January to restructure $5.4 billion of debts with its formal creditors, including China and France.

With the aid of $3 billion in IMF loans secured last year as well as loans from the World Bank, Ghana has been working to recover from a serious economic crisis and debt default. This is the time that the measure is moving through parliament.

Its $3 billion plan with the IMF had been unlocked in part because of the accord with official creditors. Nevertheless, it hadn’t yet ratified the Memorandum.

Georgieva said, addressing a media briefing in the capital Accra, that, “Ghana is in a good place now because it’s advanced negotiations with the bilateral creditors. There’s very tangible progress concerning the signing of MOU with the bilateral creditors.”

She declared that she had “strong confidence” that the Fund’s programme would be carried out as she was departing Accra.

Concerning the submission of a reform plan, Georgieva responded that the Fund had “not yet assessed in detail how we can issue a programme, but we are very keenly interested in it.” Ethiopia has requested an IMF credit programme. Georgieva reaffirmed that the Fund would shortly be sending a team to Ethiopia.

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Nigeria’s power minister condemns vandalization of energy infrastructure

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Adebayo Adelabu, Nigeria’s minister of power, has lamented the enormous amount of money lost as a result of vandals’ constant attacks on electricity infrastructure, where they blow up these facilities with explosives.

This occurred as the minister gave assurances regarding the government’s strategy to reduce debt (N2 trillion from gas providers and N1.3 trillion from GENCOs) and increase service delivery efficiency throughout the value chain.

The Minister expressed happiness with the utility company’s scorecard while being greeted by a group headed by Mrs Folake Soetan, Managing Director and Chief Executive Officer of Ikeja Electric.

“Let me start by congratulating you for the good job that you are doing here and in every district, you are still topping the list,” the Minister remarked during the formal visit to IE’s headquarters.

“I am bothered about what is happening. I am not discouraged by the sinking reputation of the power sector’s operators. I believe that this is the time that we can go around the operators to ensure that we do things differently.

“With my six months foray in this sector, I found out that achieving a stable, uninterrupted, functional, electric supply is not insurmountable. It is not as the issues are so simple. It is not rocket science. You know what to do, what to fix, what to get, and with time, you get significant improvements. It can start gradually.

He said: “There is a lack of funding in the sector, which has led to the issue of infrastructure deficit. Once, we have the money (which we are working on) and can pay for gas suppliers and generation debts, we will achieve an operational capacity of almost 8,000MW, as we have almost 13,000 installed capacity.

“On the infrastructure deficit, there is a need for the DISCOs to as a matter of urgency, drive more investment to the sector as certain infrastructure is needed to drive capacity. So, when you have an increased power supply, you should not be caught unaware.

On subsidy, Adelabu said: “We will not allow little or low investment in the sector, else it will be achieved by legislation. I am looking at capitalization requirements for DISCOs that will compel them to bring more funds. Because the power business is highly capital-intensive and requires lots of investment in infrastructure.

“But investment can never be lost; it always translates into revenue for sales and revenues for the investor. So, we believe that our Discos must be ready to invest in high-impact infrastructure.”

Since January of this year, the appalling state of the electricity supply has gotten worse as gas suppliers to gas-fired thermal power plants have stopped supplying the product to the plants because of the $1.3 billion in debt that the electricity-producing facilities owe.

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