Ghana anticipates receiving a draft term sheet from official creditors for restructuring its $5.4 billion bilateral debts, according to Finance Minister Ken Ofori-Atta.
The term sheet will enable the nation to seek International Monetary Fund board approval for a $600 million disbursement under the $3 billion extended credit facility program later this month. Ofori-Atta mentioned that the IMF board is scheduled to meet on January 18, 2024, adding, “We are receiving the draft term sheet today, so I think we are about done.”
Following this news, Ghana’s 2027 dollar bonds rose 1.3% to 43.88 cents on the dollar, while notes maturing in 2032 advanced 1.4% to 42.73 cents on the dollar. The country initiated the restructuring of most of its public debt in December 2022, focusing on the bilateral portion through the Group of 20’s Common Framework for debt treatment.
Ofori-Atta also noted that an understanding with the Paris Club Group of creditors and new creditors, including China, could unlock $550 million in additional funding from the World Bank by the end of February.
As of September 2023, Ghana’s public debt, excluding loans to state-owned enterprises, eased to 66.4% of GDP, aided by the completion of a domestic debt reorganization.
Investors, who mainly faced interest-rate cuts during the domestic debt swap of about ¢126 billion ($10.5 billion) last year, contributed to the positive trend.
Ghana’s debt reorganization efforts align with the Common Framework and are reminiscent of Zambia’s recent memorandum of understanding with official creditors on debt relief in October, though the latter has encountered challenges in concluding negotiations with eurobond investors.
Nana Ama Nyamekye/Ahotoronline
