Ghana’s Finance Minister, Ken Ofori-Atta, Outlines Plan for Debt Restructuring before IMF Loan Assessment
Ghana’s Finance Minister, Ken Ofori-Atta, recently unveiled the country’s strategy to conclude debt restructuring before the upcoming assessment of its $3 billion loan from the International Monetary Fund (IMF). The Ghanaian government is actively engaged in negotiations to secure a memorandum of understanding (MoU) with creditors, aiming to reach a debt restructuring agreement in the following weeks.
The primary objective of Ghana’s debt restructuring efforts is to reduce interest payments on its external debt by approximately $10.5 billion over the next three years, as stipulated in the $3 billion loan agreement with the IMF.
During a briefing in Accra, the finance minister disclosed that discussions with creditors, including bilateral debt treatment under the G20 common framework for debt treatment, have been progressing positively. The government is collaborating with the Paris Club and other creditors to establish the parameters for official debt restructuring. The finalization of the MoU on terms with bilateral debt treatment is a priority in the coming weeks.
Additionally, Ghana is actively engaging private creditors and Eurobond investors to swiftly seek a resolution for the country’s foreign debt. The finance minister emphasized the goal of concluding these negotiations before the next review scheduled for September.
The government is also taking steps to address the debt related to independent power producers in the energy sector. By the end of June, an energy sector reform plan will be implemented, facilitating the resolution of the debt owed, which has increased from $1.58 billion to $2 billion as of May 2023.
With these concerted efforts and strategic measures, Ghana aims to successfully navigate its economic challenges and achieve debt restructuring before the crucial IMF loan assessment, demonstrating its commitment to financial stability and sustainable economic growth.