Ghana has successfully reached an agreement with its bilateral creditors to restructure a substantial $5.n4 billion in loans.
The Ministry of Finance issued a statement commending Ghana’s official creditors under the G20 Common Framework for their support in this crucial step toward long-term debt sustainability.
The agreement, reached within the framework of the G20 Common Framework, follows the completion of the Domestic Debt Exchange Programme (DDEP) in 2023. The government views this as a substantial stride toward restoring Ghana’s long-term debt sustainability.
“The Government of Ghana commends the support and cooperation of its Official Creditors in reaching this agreement, which demonstrates a mutual commitment to restoring debt sustainability in line with the International Monetary Fund (IMF) programme targets,” the statement inidicated.
The government expressed confidence that the debt treatment would provide significant relief, enabling the allocation of additional financial resources to critical public investments in healthcare, education, and infrastructure development.
The agreed-upon terms of the debt treatment are anticipated to be formalized in a Memorandum of Understanding between Ghana and official creditors, to be implemented through bilateral agreements with each member of the official creditor Committee.
This agreement with official creditors serves as a catalyst for the approval of the first review of the Fund-supported program by the IMF Executive Board. This approval will trigger the disbursement of the next tranche of IMF financing amounting to $600 million.
Additionally, the World Bank is expected to consider $300 million in Development Policy Operation (DPO) financing, with an extra $250 million to support the Ghana Financial Stability Fund.
Finance Minister Ken Ofori-Atta expressed optimism, stating, “Ghana has indeed turned the corner.” He highlighted key economic indicators, including a significant decline in inflation to 23.2% in December 2023 and a commendable performance of the Ghana cedi, which only experienced marginal depreciation. The country also recorded an overall real Gross Domestic Product growth of 2.8% for the first three quarters of 2023.
The Finance Minister emphasized the importance of today’s agreement with official creditors in supporting engagements with Ghana’s commercial creditors, including bondholders.
