Debt cancellation: China may extend maturity date instead of haircut – Redd Intelligence

Ghana is seeking debt cancellation from China as its talks with the International Monetary Fund.

According to Mark Bohlund, Ghana may not face the same fate as Zambia and Sri Lanka as the debts owed are not significant.

He said, “I think it [China] could, but I think it’s important to keep in mind that the Chinese lending, the Chinese part of the external debt in Ghana is very much lower than it is in, for instance, Sri Lanka and Zambia, and that’s one reason to believe that it should be a lot easier to get a deal.”

He also added that in the case that Ghana does not get what it is seeking from China, the IMF may “deem that they [Ghana] have sufficient financing assurances to get an IMF Executive Board approval of the IMF programme agreed on staff level previously.”

“Yes, essentially the IMF I think in this case can deem away that even if the Chinese don’t agree, they could do that.

“I think it is more likely that the Chinese will agree with us over debt re-profiling and just extending maturities rather than having a haircut on the debt and that will be enough to seal a deal with the IMF,” he was quoted by myjoyonline.com.

SSD/FNOQ