The Ghanaian parliament has approved a $2.8 billion debt restructuring deal with 25 creditor nations, including China and France to pave way for disbursements under an IMF bailout programme to alleviate the country’s economic crisis. The 25 participating creditor countries also include the United States, Germany, and the United Kingdom.
Ghana had signed a memorandum of understanding with its creditors in January after defaulting on most of its external debt in December 2022. This new deal is therefore a welcome development for the country.
Debt Restructuring
The International Monetary Fund (IMF) had approved a $3 billion, three-year bailout for Ghana in May 2023, helping to stabilise Ghana’s economy and leading to a Fitch rating revision.
The debt restructuring was contained in a a parliamentary report sighted by Reuters “The terms of the debt treatment offer a debt service relief of $2.8 billion during the Fund-supported programme period (2023-2026),” it read.
Under the restructuring terms, debt service payments due between December 20, 2022, and December 31, 2026, will be rescheduled, capitalised, and repaid from 2039 to 2043, delaying repayments by over 15 years, the report said.
The official creditor Committee set interest rates at 1% to 3% to capitalise rescheduled amounts, depending on the original contractual rate, offering Ghana’s treasury savings below market levels, the report said.
“The Committee noted that the debt restructuring was critical in supporting government to restore and sustain macroeconomic stability and debt sustainability,” the report concluded. Ghana would continue negotiations with commercial creditors to complete its debt restructuring.
