Ghana has successfully concluded negotiations with external creditors regarding a debt restructuring crucial to securing its $3 billion credit line from the International Monetary Fund (IMF), the West African country and the IMF announced on Saturday.
The deal with external creditors clears the path for a vital $600 million 2nd tranche payment from the Fund to Ghana, which secured the $3 billion IMF loan in 2023 to bolster its finances and tackle its mountainous debt burden.
The first tranche of $600 million arrived in May 2023, with subsequent releases contingent on progress in debt restructuring.
Facing one of its most severe economic crises in decades, Ghana sought financial assistance from the IMF to bolster its public finances and manage its substantial debt burden more effectively.
The state of Ghana’s economy is expected to be a focal point in the run-up to the December presidential election, during which President Nana Akufo-Addo’s New Patriotic Party will vie for an unprecedented third term.
In a statement late Friday, the Finance Ministry termed this development as a “significant positive step towards restoring Ghana’s long-term debt sustainability.”
Last year, Ghana undertook a restructuring of its domestic debt, and due to challenges in addressing its substantial balance of payments deficit, it suspended payments on the majority of its external debt, essentially defaulting.
The debt restructuring parameters encompass both bilateral and commercial debt, including Eurobonds.
IMF Managing Director Kristalina Georgieva welcomed the agreement, stating that it aligns with the goals of the IMF-supported program, aiming to restore macroeconomic stability and debt sustainability. She mentioned that the deal clears the path for the IMF Executive Board to consider the first review of Ghana’s three-year agreement “in the next few days.”
The Ghanaian government anticipates that the IMF Board’s approval will also prompt the World Bank Board to review $300 million in development financing for the country.
