The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has stressed the necessity of boosting multilateral coordination and regulatory efficiency to effectively manage sovereign debt issues in low-income countries (LICs).

He proposed the establishment of a robust Global Sovereign Debt Roundtable (GSDR) to address this need.

During the IMF-African Caucus Meeting at the World Bank/IMF Meetings in Marrakech, Morocco, Dr. Addison underscored the significance of this initiative.

“We call for a carefully designed debt resolution mechanism, especially for vulnerable members with large domestic creditors – such as Ghana, to help avert domestic financial market instability,” Dr. Addison stated in his address to attendees at the conference.

He emphasized the need for a well-designed debt resolution mechanism, especially for vulnerable members with substantial domestic creditors, such as Ghana, to mitigate the risk of domestic financial market instability.

Additionally, he highlighted the need to enhance the G20 Common Framework (CF) to ensure a more timely, orderly, equitable, inclusive, and transparent debt restructuring process for distressed members in the region, including countries like Ghana, Ethiopia, and Malawi.

Given the acute debt challenges faced by African economies, worsened by factors such as the COVID-19 pandemic, the Ukraine conflict, tightening global financing conditions, and climate-related disasters, Dr. Addison urged the IMF to provide crucial support to vulnerable African economies.

He suggested that the IMF should adapt its lending toolkits to changing global conditions and align PRGT access thresholds with those of the GRA to facilitate uniform treatment and easier access to adequate Fund support for vulnerable members.

Dr. Addison also stressed the importance of securing additional pledges from willing donors to close resource gaps in PRGT, reinforcing the IMF’s finances while protecting the quota share of vulnerable members.

He emphasized the need for tailored capacity development and surveillance support from the Fund, in collaboration with international partners, to address member-specific challenges and restore public debt sustainability.

These recommendations are presented at a critical juncture when over half of sub-Saharan African (SSA) members face high debt distress risk, and the region's economic growth is projected to further decelerate in 2023.

Dr. Addison's proposals aim to offer immediate relief to struggling economies and foster inclusive and sustainable growth in the region.

The call for a stronger GSDR and enhanced cooperation between the IMF, MDBs, and RDBs underscores the urgency of addressing global economic challenges affecting low-income countries.