Ghana Signs Debt Restructuring Agreement.

Ghana has signed a memorandum of understanding (MoU) with its bilateral creditors, including China and France, to restructure $5.4 billion of debt. This agreement is a crucial step towards securing $360 million from the International Monetary Fund (IMF) under Ghana’s $3 billion bailout program, expected next month.

The MoU provides a framework for restructuring loans from official creditors, following an agreement by the Paris Club in January. Ghana defaulted on most of its $30 billion external debt during the pandemic. Since then, inflation has dropped from 54.1% in December 2022 to 25% in April 2024, with GDP growth reaching 2.9% in 2023.

The IMF has declared Ghana’s debt unsustainable, aiming to reduce the public debt-to-GDP ratio from 88.1% in 2022 to 55% by 2028. Terms with official creditors are crucial for bondholders, who seek equitable treatment under the G20 Common Framework for debt restructuring.

Ghana completed a domestic debt restructuring in October, saving 61 billion Ghanaian cedis ($17.5 billion). The government continues to work towards meeting IMF requirements for its debt restructuring program.

The signing of the MoU is the latest milestone in Ghana’s long-running debt restructuring saga. Ghana and its Official Creditor Committee reached an agreement in June last year.

All participating creditor countries have now signed the deal, the finance ministry’s statement said, adding that it provided significant debt-service relief over its International Monetary Fund loan programme.

Ghana is still speaking to its commercial external creditors to finalize restructuring agreements with them. The finance ministry’s statement also said that the country is committed to finding a comparable agreement as early as possible.

The agreement marks a crucial step towards Ghana restoring long-term debt sustainability. The financial terms of the agreement remain unchanged and it provides significant debt service relief during the Fund-supported program period.

The deal allows financial resources to be directed towards critical areas such as infrastructure, healthcare, and education. The formalization of the OCC agreement is expected to pave the way for the approval by the IMF Executive Board of the second review of the Fund-supported Post-COVID-19 Programme for Economic Growth.

The IMF Board’s approval should also trigger more financial assistance from development partners, particularly the World Bank. The agreement will also bolster the current and ongoing discussions with private creditors.

Ghana continues to engage in good faith with all commercial external creditors, striving to finalize restructuring agreements that respect Ghana’s need for debt relief and the comparability of treatment principle.

The Honourable Minister for Finance, Dr. Mohammed Amin Adam M.P, said that the Ministry of Finance on behalf of the Republic of Ghana extends its gratitude to all members of the OCC, particularly the committee’s co-chairs, China and France.

The minister also expressed appreciation for their unwavering commitment to assisting Ghana in resolving its debt issues. This landmark agreement marks an extraordinary milestone in Ghana’s debt restructuring journey.

The agreement will further strengthen Ghana’s ambitious reform agenda with the strong support of its development partners. Ghana is committed to implementing the necessary reforms to restore debt sustainability and promote economic growth.

The debt restructuring agreement is a significant step towards achieving this goal. Ghana is confident that the agreement will provide the necessary framework for the country to restore its debt sustainability and promote economic growth.

The government is committed to working closely with its creditors and development partners to ensure the successful implementation of the agreement. Ghana is grateful for the support of its development partners and is confident that the agreement will have a positive impact on the country’s economy.

The debt restructuring agreement is a critical step towards restoring Ghana’s debt sustainability. The agreement provides a framework for restructuring Ghana’s debt and promoting economic growth.

Ghana is committed to implementing the necessary reforms to restore debt sustainability and promote economic growth. The government is working closely with its creditors and development partners to ensure the successful implementation of the agreement.

The debt restructuring agreement is a significant achievement for Ghana. The agreement provides a framework for restructuring Ghana’s debt and promoting economic growth.

Ghana is grateful for the support of its development partners and is confident that the agreement will have a positive impact on the country’s economy. The government is committed to working closely with its creditors and development partners to ensure the successful implementation of the agreement.

The debt restructuring agreement is a critical step towards restoring Ghana’s debt sustainability. The agreement provides a framework for restructuring Ghana’s debt and promoting economic growth.

Ghana is committed to implementing the necessary reforms to restore debt sustainability and promote economic growth. The government is working closely with its creditors and development.