Ghana Secures Debt Deal As Part Of IMF Loan
Ghana has reached an agreement with external creditors for a debt restructuring that was key to its $3 billion credit line with thegovernment and the lender said.
Facing itseconomic crisis in decades, Ghana agreed to a loan from the International Monetary Fund (IMF) to shore up its public finances and better manage its heavy debt load.
Ghana’s economic outlook will be a major part of campaigning for the presidential election inwhen President Nana Akufo-Addo’s New Patriotic Party will seek an unprecedented third term in office.
Ghana received its first $600 millionin May last year.
The external debt dealthe way for approval of another $600 million payment.
“This development constitutes a significant positive step towards restoring Ghana’s long-term debt sustainability,” a Finance Ministry statement said late Friday.
Last year Ghana successfullya restructuring of its domestic debt.
Ghana suspended payments on the majority of its external debt, essentially defaulting due to challenges in addressing its substantial balance of payments deficit.
The restructuring parameters encompass both bilateral and commercial debt, including Eurobonds.
IMF managing director Kristalina Georgieva welcomed Ghana reaching “an agreement in principle with their official creditors on debt treatment, consistent with the objectives of the IMF-supported program, which aims to restore macroeconomic stability and debt sustainability”.
She said the deal “clears the path for IMF Executive Board consideration” of the first review of Ghana’s three-year agreement “in the next few days”.
The Ghanaian government expects approval from the IMF Board. It will also prompt the World Bank Board to review $300 million in development financing for the country.