Ghana is expected to soon reach an agreement with its external creditors, particularly the Paris Club, on restructuring the country’s external debt, according to the International Monetary Fund (IMF).
The agreement would pave the way for the IMF board to approve a programme for Ghana in May 2023, which would enable the country to secure a $3 billion Extended Credit Facility (ECF) to boost its Balance of Payment.
Julie Kozack, Director of Communications at the IMF during a press conference said “Financing assurances from official bi-lateral creditors are necessary for presenting the programme to the Executive Board”.
“We have seen strong progress toward creditors delivering on these financing assurances, and we’re hopeful that they can be delivered very rapidly”, she added.
In December 2022, the IMF reached a Staff Level Agreement with Ghana for a three-year program ECF for about $3 billion.
Ghana has already successfully concluded a Domestic Debt Exchange Programme, with the participation of key stakeholders such as the Ghana Bankers Association, the Ghana Insurers Association and the Chamber of Corporate Trustees.
The IMF loan programme is part of a wider effort to support developing countries as they recover from the impact of the Covid-19 pandemic.
The Economist Intelligence Unit (EIU) in its 2023 Country Report on Ghana warned that the IMF board approval for Ghana may be delayed due to prolonged external debt-restructuring negotiations, given the involvement of multiple stakeholders in the process.
The EIU expects Ghana to secure restructuring agreements on its public external debt during 2023-2024, involving official and private creditors alike.
These agreements are likely to include a combination of write-offs, maturity extensions and reductions in interest rates.