Jump to navigation

Ghana

Agreement likely on $5.4 billion debt restructure this week

Finance minister claims terms offered by creditors will help unlock next tranche of credits from IMF

As critical talks between ministers and official creditors (including the Paris Club and Chinese lenders) on restructuring  US$5.4 billion of Ghana's external debt continue this week, a senior IMF official said on 9 January that the fund was optimistic about an agreement which would unlock the next $600 million of financial support as part of the country's $3bn extended fund facility programme.

A deal with official creditors could also unlock $550m of funding from the World Bank. Credits from the IMF and the Bank are conditional on the terms of the debt restructuring and Ghana's ability to meet financial targets.

On 11 January, Ghana's finance minister Ken Ofori-Atta told journalists in Accra that the government was reviewing a draft term sheet from the creditors whose scope was sufficient to meet the IMF's concerns about state finances.

Bloomberg News reported that Ghana's US dollar bonds had gained by 1.3%-1.4% on the finance minister's statement.

Ofori-Atta led the government team in meetings that began on 8 January with the Official Creditor Committee (OCC), co-chaired by the governments of China and France, which holds around 25% of Ghana's $20bn external debt earmarked for restructuring.

Officials have indicated that the talks will also focus on brokering an agreement on a 'cut-off date,' after which new loans from bilateral creditors will not face restructuring. Release of the next tranche of funding from the IMF is contingent on a restructuring deal.

President Nana Addo Dankwa Akufo-Addo's government wants to conclude the debt restructuring and IMF deal early this year. That would give it enough time to engineer some kind of economic feel-good factor ahead of December's general election (AC Vol 65 No 1, The economy will tilt the election).

Vice-President Mahamudu Bawumia is the ruling New Patriotic Party's presidential candidate and is due to launch his campaign later this month in what is shaping up to be a close contest with the opposition's New Democratic Congress (NDC) candidate, former President John Mahama.



Related Articles

Crude deal

Government plans to borrow US$1.6 billion to buy back stakes in two offshore licences not yet in development have triggered anger and incredulity from oil industry officials and...


Africa’s growth plans face stronger headwinds

In a much harsher international climate, Africa’s economic managers are promoting regional trade and boosting investment in power and transport

Bankers hosting parties for their government friends were a little more discreet than usual – perhaps in deference to rising political and economic uncertainties – at the annual...


Slow movers

The opposition and ruling parties grow anxious as the STX housing deal shows no progress on its first anniversary

A year after it was first proposed, the US$1.5 billion housing deal between a South Korean company, STX, and the Ghanaian government is no nearer completion. The contract...


Mahama’s plans clash with IMF strictures

After winding up the tortuous debt deal in June, the government will be hemmed in by creditors and multilateral banks

The end of Accra’s debt default tunnel is nigh. After signing a memorandum of understanding with the official creditor committee, Ghana is forecast to end the restructuring of...