The government of Ghana has reached a debt treatment agreement with her official creditors under the G20 Common Framework.
The new agreement replaces the initial suspension of debt, which was implemented after the domestic debt exchange programme (DDEP) last year.
In a statement announcing the deal, the Finance Ministry said that “this development constitutes a significant positive step towards restoring Ghana’s long-term debt sustainability,” facilitating the provision of more funding for its development projects.
“This agreement with the Official Creditors paves the way for IMF Executive Board approval of the first review of the Fund-supported programme, allowing for the next tranche of the IMF financing of US $600 million to be disbursed. The IMF Executive Board approval should trigger the World Bank Board consideration of US$300 million for Development Policy Operation (DPO) financing. In addition, the World Bank is expected to support the Ghana Financial Stability Fund with US$250 million to help address the impact of the DDEP on the financial sector,” the statement revealed.
Government noted, however, that the terms of the agreement will be formalised in an MOU between Ghana and the Official Creditors.
Implementation, it added, will be between separate bilateral agreements with each member of the Official Creditor Committee.
According to the Ministry, the agreement with the G20 Official Creditors will aid ongoing discussions with Ghana’s commercial creditors, including bondholders, which it hopes will be completed soon.
This agreement comes after reports of the Official Creditors not being satisfied with the government’s debt operation terms, thereby affecting the IMF Board’s approval for the second release of US$600 million of the US$3 billion 3-year ECF, which was expected in November last year.
