Ghana Awaits Financial Assurances from Official Creditor Committee by April 2023 for IMF Board Approval
By the end of April 2023, the Official Creditor Committee is expected to provide Ghana with the much-awaited financial assurances. This will lead to the International Monetary Fund Board’s approval in May 2023.
The Ministry of Finance and the Bank of Ghana jointly organised an investors’ presentation, where the government confirmed its expectation of a Memorandum of Understanding with Official Creditors by June or July 2023.
The government also expects completion of Comprehensive Debt Exchange Operations by April 2023. In addition, negotiations with commercial creditors are set to begin, aimed at reaching an agreement in principle on a term sheet for the restructuring of Eurobonds.
The restructuring of external debt is necessary, as stated by the Finance Minister, Ken Ofori-Atta, to restore debt sustainability and ensure full financing of the programme.
The external debt restructuring exercise will include two-thirds of Ghana’s $30.5 billion external debt. Multilateral Development Institutions held $8.8 billion of Ghana’s total debt stock as of the end of 2022, while non-resident investors held $1.6 billion of the country’s debt at the end of December 2022.
The objective of this exercise is to meet the International Monetary Fund/ World Bank Lower Income Country (LIC) Debt Sustainability Framework (DSF) targets.
Unfortunately, in 2022, the government was in breach of three out of the five IMF/World Bank LIC DSF indicators.