AMBASSADOR AND FINANCE MINISTER SIGN BILATERAL

UNCLAS ACCRA 000650

SIPDIS

DEPT PASS EXPORT IMPORT BANK

E.O. 12958: N/A
TAGS: EFIN KTIA KMCA
SUBJECT: AMBASSADOR AND FINANCE MINISTER SIGN BILATERAL
PARIS CLUB AGREEMENT

REF: A. STATE 32572

B. 2004 STATE 177743


1. Ambassador Yates and GoG Finance Minister Kwadwo
Baah-Wiredu signed the bilateral Paris Club debt reduction
agreement (Refs A and B) on Thursday, March 31, 2004. Under
the agreement, the U.S. forgives USD 4,641,600, which
represents 100 percent reduction of the eligible stock of
debt owed to the U.S. (Note: ExImBank holds the debt treated
by this agreement. End Note)


2. Per Ref B instructions, Post faxed a copy of the original
to Tim Forsyth and Alisa Wong in EB/IFD/OMA, and pouched the
original to Karen Ghaffarkhan in L/T. The Ambassador and
Finance Minister signed two copies, with the GoG retaining
one original, executed agreement. Embassy has also kept a
copy for its records.


3. Post issued a press release with photos to local media
announcing the signing and congratulating the GoG on its
impressive economic achievements over the last two years,
which culminated in the IMF/World Bank approval of HIPC
completion point in early July 2004 and subsequent Paris Club
approval of debt reduction (under "Cologne terms") for Ghana
on July 22, 2004.


4. Post emphasized in its press release that the USG is
supporting Ghana's development in a number of ways, including
providing large grant assistance from USAID (approximately
USD 550 million since 1995),military to military assistance,
and visitor and cultural programs through Public Affairs, and
also noting that the U.S. has included Ghana among the 16
countries eligible for significant grant assistance under the
Millennium Challenge Account.


5. Comment: Post expected the Minister to raise the
possibility of forgiveness of post-cutoff date ExIm debt
(totaling approximately USD 100 million). The Minister did
not raise this issue during the meeting, but we are aware
that members of his staff are working on a formal request.
The GoG did not issue its own press announcement following
the signing. End Comment


6. Post appreciates the strong support from EB/IFD/OMA (Tim
Forsyth and Alisa Wong) and ExImBank (Cheryl Moriarty,
Esteban DelaRiva, and Thomas Matthias).
YATES