Ghana reaches agreement to restructure $13bn debt



Ghana has reached an agreement in principle with two bondholder groups to restructure approximately $13bn of international debt, a negotiating group announced on Monday (June 24).

This development marks a significant step forward in the West African country’s economic recovery efforts under an International Monetary Fund (IMF) loan deal.

The agreement involves considerable concessions from bondholders, aimed at stabilising Ghana’s financial situation. Bondholders have agreed to forego about $4.7bn of their claims, which translates to a 37% effective nominal haircut, an increase from the initial 33% offer.

Additionally, the deal provides approximately $4.4bn in cash flow relief during the period of Ghana’s financial support programme with the IMF.

Ghana has been grappling with its worst economic crisis in years, with inflation recorded at 23.1% in May, down slightly from 25% in April, while the cedi has lost more than 20% of its value against the US dollar this year.

The gold- and cocoa-producing country defaulted on most of its $30bn in external debt in 2022, a consequence of the global Covid-19 pandemic, a surge in inflation, depreciation of the cedi, spillover from the war in Ukraine, and higher global interest rates.

The Ministry of Finance confirmed in a separate statement that the formal launch of a consent solicitation is expected in the coming weeks. This will finalise a three-step debt restructuring process that began in December 2022, writes the AFP.

This agreement follows a recent deal with Ghana’s bilateral creditors, setting the stage for the IMF’s executive board to approve a $360mn disbursement after the second review of Ghana’s $3bn relief package.

Source: Daily Mail GH

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