The Governor of the Bank of Ghana, Dr Ernest Addison has asked the International Monetary Fund (IMF) to adapt its lending toolkits in line with the changing global conditions.
He said given the fragmented global financial architecture, the IMF had to remain steadfast and adapt its lending toolkits to serve its vulnerable members better.
Speaking on behalf of his fellow African central bank governors at the World Bank/ IMF Meetings, he called for increased concessional financing by aligning its Poverty Reduction and Growth Trust access thresholds with those of the General Resources Account (GRA) to ensure uniformity of treatment.
“In addition, we call on the Fund to relax the PRGT eligibility criteria to foster access to adequate Fund support while reducing, suspending, or eliminating entirely surcharges for most vulnerable PRGT-eligible members facing acute debt challenges.
We also reiterate our call for additional pledges from willing donors to close the gaps in PRGT resources,” he stated.
Dr Addison also called for the need to successfully complete the ongoing 16th General Review of Quotas to reinforce IMF finances while protecting the quota share of the vulnerable members.
Strengthening multilateral coordination
The Governor also emphasised the need to strengthen multilateral coordination and efficiency of regulatory framework for debt resolution in low income countries through a formidable Global Sovereign Debt Roundtable (GSDR).
He said while welcoming the latest developments on Zambia and Chad, the governors underscore the need to revamp the G20 Common Framework (CF) to ensure timely, orderly, equitable, inclusive, and transparent debt restructuring for distressed members in the region (including, Ghana, Ethiopia, and Malawi).
“In this regard, we call for a carefully designed debt resolution mechanism, especially, for vulnerable members with large- domestic creditors (as in the case of Ghana) to help avert domestic financial market instability.
“In addition, improving debtor-creditor engagements through an enhanced GSDR while strengthening technical support to foster common understanding of all debt issues is macro-critical to bolster a swifter, proactive and systematic restructuring,” he stated.
Enhanced cooperation
Dr Addison also noted that an enhanced IMF cooperation with multilateral development banks (MDBs) and regional development banks (RDBs) was critical to facilitate timely provision of financial assistance to members facing significant debt and growth challenges.
In this context, we restate the call for new SDR allocation through the MDBs/RDBs’ (including AfDB), given their multiplier effects in achieving climate and development goals.
“We also request that the Fund leverages its close engagements with G20 members to advocate for better lending terms from the ongoing design and implementation of the G20 Capital Adequacy Framework (for MDBs) to avert inadvertent financing ramifications on vulnerable members in Africa,” he mentioned.
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