Ghana’s official creditors agree on key restructuring date
- Ghana's official creditors have agreed to restructure debts until December 2022, bringing the country closer to a crucial step in the restructuring process.
- Successful negotiation with official creditors could lead to the disbursement of $600 million by the IMF's Executive Board as part of Ghana's $3 billion bailout program.
- The discussions regarding the "cut-off date" for new loans from bilateral creditors were challenging but have been resolved.
Ghana's official creditors have reportedly reached an agreement to restructure debts extended to the country until December 2022, according to two sources cited by Reuters. This development brings Accra closer to a crucial step in its restructuring process.
The successful negotiation between Ghana and its official creditors is a significant milestone that could lead to the approval of the disbursement of $600 million by the Executive Board of the International Monetary Fund (IMF). This disbursement is part of Ghana's $3 billion bailout program with the IMF.
The discussions surrounding the "cut-off date," referring to the date after which new loans from bilateral creditors will not be subject to restructuring, had recently posed a challenge to reaching an agreement.
Bilateral lenders, led by China and France co-chairing the Official Creditor Committee (OCC), collectively holding about a quarter of Ghana's $20 billion external debt targeted for restructuring, have played a pivotal role in the negotiation process. Among these lenders, preferences for the "cut-off date" varied, with some advocating for December 31, 2022—marking Ghana's default that month—while others supported March 24, 2020. The latter date corresponds to the initiation of the Group of 20's debt service suspension initiative (DSSI), designed to assist the world's poorest nations in dealing with the repercussions of the COVID-19 crisis. Notably, Ghana chose not to participate in the DSSI.