Ghana Nears Final Step in $5.4 Billion Debt Restructuring with Bilateral Creditors
The draft MoU is anticipated to unlock the third tranche of $360 million from the International Monetary Fund (IMF), as part of Ghana's extended facility programme with the fund. Finance Minister Dr. Mohammed Amin Adam announced the development, emphasizing the government's commitment to finalizing and signing the agreement promptly.
The government of Ghana has received a draft memorandum of understanding (MoU) from the Official Bilateral Creditor Committee, co-chaired by France and China. This marks the final step in the country’s negotiations to restructure $5.4 billion of its bilateral debts.
At a news conference in Accra, Finance Minister Dr. Mohammed Amin Adam revealed that the government, with the aid of its financial and legal advisors, is set to review and finalize the MoU with the creditor committee. The signing of this agreement is crucial for the IMF Executive Board’s approval of the second review of Ghana’s three-year programme with the fund, leading to the release of an additional $360 million. This would bring the total disbursement under the programme to $1.56 billion, following an initial $1.2 billion already received.
Background
Ghana’s engagement with the IMF involves comprehensive restructuring of both domestic and external debts. In December 2022, the country sought debt treatment under the G20 Common Framework. Financing assurances from the Official Creditor Committee (OCC) were secured in January 2024, enabling the IMF to approve the first review of Ghana’s Post COVID-19 Programme for Economic Growth (PC-PEG).
The receipt of the MoU from the OCC is a pivotal step towards formalizing this agreement, which is essential for the subsequent financial support from the IMF.
Domestic Debt Restructuring
On the domestic front, Dr. Amin Adam highlighted that the government's financing has been restricted to Treasury Bills (T-Bills) due to the ongoing debt restructuring programme. Despite concerns over high T-Bill rates post-Domestic Debt Exchange Programme (DDEP), the government has assured market participants of its commitment to meeting its obligations.
“We have successfully paid two bullet coupons, each about GH¢6 billion for the DDEP, and we assure the market that the third coupon, due in August 2024, will be honored,” Dr. Amin Adam stated.
The government's reassurances aim to stabilize the domestic market as it navigates through its debt restructuring efforts.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from TOP KNOWLEDGE MEDIA.
Contact: toppknowledgemedia@gmail.com
Stay informed and ahead of the curve! Follow The TOP KNOWLEDGE MEDIA on WhatsApp for real-time updates, breaking news, and exclusive content. Don't miss a headline – join now!
Join Top Knowledge Media Channel:
https://whatsapp.com/channel/0029VaEUCpP4NVigCMWy8J22
What's Your Reaction?
