German Ambassador to Ghana Daniel Krull stated that the German government is eager to assist Ghana with the approval of the country's application for debt elimination with external creditors.
The Finance Minister, Ken Ofori Atta, is slated to head a high-powered government delegation to China to advocate for the adoption of the nation's demand for debt forgiveness. Ofori-Atta disclosed to German Minister Svenja Schulze that China had committed to bilateral negotiations.
Ghana hopes to restructure $5.7 billion in debt, of which China holds a third, or $1.7 billion.
In an appearance on Foreign Affairs on Joy News, the German Ambassador to Ghana, Daniel Krull, stated that his country is only willing to assist if certain criteria are satisfied.
He listed three prerequisites Ghana must meet.
He stated, "First and foremost, we [Germans] stress that the actions that may be done in our country must be implemented. The second condition is that we are willing to shoulder our fair share of duty as one of Ghana's largest bilateral donors.
"But only if everyone else joins in this effort." Moreover, a multilateral structure was established specifically for these types of situations, and we urge and attempt to convince all parties involved in this process to adhere to this framework. It's the G20 structure."
He said, "Let me highlight three points. The energy sector in Ghana is the largest contributor to losses.
"In this sector alone, $1.5 billion in new debt is accumulated annually. Therefore, if that is not resolved and you request $10 billion from the IMF, you will not fix the problem in the medium run.
"Therefore, Ghana must find a solution to the 50% technical and non-technical energy sector losses. If this is not rectified, I do not see how we can find a sustainable solution to the country's financial challenges."
The second component he noted "is on the opposite side of the budget, namely the revenues. Ghana has one of the lowest tax to GDP ratios, less than 13 percent. Therefore, we have been engaging with the local authorities and establishing a very intelligent method for collecting property taxes.
"Therefore, I believe this is a critical step forward, and it must be taken, as well as processes and decision-making must be accelerated, in order to achieve the goals and fulfill the IMF-agreed-upon objectives."
He claimed that he is "still astonished by the methods for how the budget is put up and how tough it is to comprehend how everything works.
"And I believe this is something that requires (improvement) approval. However, he is optimistic that with the requisite political will, new chances for economic growth will be established."
Internally and externally, Ghana is restructuring its debt in order to qualify for International Monetary Fund financing (IMF).
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