Ghana in debt restructuring deal with official creditors - finance ministry

The West African country, which defaulted on most of its overseas debt in December 2022 after debt servicing costs soared, restructured most of its local debt and also needs to reach a deal with private holders of about $13 billion in international bonds. "Thank you to our bilateral creditors for their support & cooperation, that has today enabled us to reach agreement with our Official Creditors on comprehensive debt treatment under the G20 Common Framework," the office of Finance Minister Ken Ofori-Atta said on X.

Ghana has reached a deal to restructure $5.4 billion of loans with its official creditors, the finance ministry said on Friday, a milestone in the country's quest for debt relief as it charts its way out of the worst economic crisis in a generation.

The agreement with bilateral lenders including China and France was key to unlocking new International Monetary Fund (IMF) financing and will allow Ghana to access another $600 million under its $3 billion bailout program. The West African country, which defaulted on most of its overseas debt in December 2022 after debt servicing costs soared, restructured most of its local debt and also needs to reach a deal with private holders of about $13 billion in international bonds.

"Thank you to our bilateral creditors for their support & cooperation, that has today enabled us to reach agreement with our Official Creditors on comprehensive debt treatment under the G20 Common Framework," the office of Finance Minister Ken Ofori-Atta said on X. The post did not provide further details on the terms of the agreement. There was no mention of the "cut-off date" - the date after which new loans signed with bilateral creditors will not be restructured - which emerged recently as a stumbling block to an agreement.

Two sources told Reuters

earlier on Friday that Ghana's official creditors had agreed to restructure debts that were extended to the country up until December 2022. The gold and cocoa producer aims to cut $10.5 billion from its external debt repayments and interest costs that were due from 2023 to 2026 and implement an IMF reform programme.

Ghana first sent "working proposals" for the debt restructuring to the official creditor committee in June 2023, having been locked out of international capital markets and seeing inflation spiral in the lead-up to its default. Ghana is aiming to restructure $20 billion out of total external debt that was about $30 billion at the end of 2022, according to a government presentation to investors.

The debt is being restructured under the Common Framework, a process set up during the COVID-19 pandemic by the Group of 20 economies. Chad, Ethiopia and Zambia have also made debt relief requests under the platform, which has seen slow talks due to coordination issues and disagreements over assessing comparability of treatment between different type of creditors.