After months of tough negotiations, Ghana is on the verge of finalizing an agreement with its international bondholders to restructure an external debt of around $13 billion. While significant progress has been made in discussions, a final deal is yet to be clinched.
The Ministry of Finance provided reassurance to the Ghanaian population by announcing a provisional agreement and confirming ongoing negotiations with bondholders. However, reports suggest that Ghana is still in need of a viable agreement with two bondholder groups.
Ghana and its creditors are aiming to meet debt limits set by the IMF to ensure debt sustainability. This impasse comes after Ghana defaulted on most of its $30 billion foreign debt just over a year ago.
Majority of Ghana’s external debt is held by commercial lenders, including bondholders like BlackRock. Multilateral development banks have a substantial share, followed by the Paris Club and China.
The debt crisis has exacerbated challenges for Ghanaians, with currency depreciation against the US dollar and rising inflation. In January, the IMF approved a disbursement of $600 million for Ghana under its lending program.
Finance Minister Dr. Mohammed Amin Adam stated on April 14 that sufficient monitoring mechanisms are in place to achieve IMF-supported program goals, even in the election year of 2024.
The Minister is leading Ghana’s delegation to the IMF and World Bank Spring Meetings in Washington, DC, as the country strives for a balanced and sustainable debt solution that paves the way for long-term economic stability.