External Debt Restructuring: SLA a healthy sign for Ghana’s external creditors – Terkper
Former Finance Chief, Seth Terkper, has said the attainment of a Staff Level Agreement (SLA) with the IMF, is a good step in undertaking an external debt restructuring programme for external creditors.
According to him, the SLA is a ‘healthy sign’ to external creditors that the country is committed to restoring debt sustainability.
Adding that, an agreement between government and domestic creditors on the current Domestic Debt Exchange Programme (DDEP), may make external creditors more accommodative to an external debt restructuring programme.
“SLA is a positive step, but the most important thing is for domestic creditors to continue to come to an agreement on the domestic debt restructuring programme, which will be a healthy sign for external creditors for an external debt restructuring,” quipped the former Finance Chief.
At the moment, most labour unions in the country have opposed government’s debt restructuring programme requesting for exclusion from the programme as it will negatively impact the pensions of their members.
The Ghana Insurance Association (GIA), has also raised concerns about its inability to pay claims to policyholders should government go ahead with the debt restructuring programme which the Association expects to significantly impact the liquidity position of its members.
An external debt restructuring programme is likely to cause an uproar among external creditors, same as it did among domestic creditors when the DDEP was announced by government on December 5, 2023.
An unfavorable debt restructuring programme for external creditors, is likely to severely impact Ghana’s chances of raising long term capital from the international debt market.
Currently, Ghana’s debt to external creditors is in the range of $28bn.
Meanwhile, Ghana has commenced external debt restructuring discussions with its external creditors, Finance Chief Ken Ofori-Atta has said.
Making the disclosure during a joint press briefing by the Finance Ministry and the IMF, Mr Ofori-Atta averred discussions with external creditors on a proposed external debt restructuring programme will intensify this week.
According to the Finance Chief, the external debt restructuring programme will affect both bilateral and individual creditors.
“We have already started external debt restructuring discussions with external creditors, but we will kick off strongly this week,” said Mr Ofori-Atta.
Touching on the parameters to be used in the creation and implementation of the external debt restructuring programme, IMF Mission Chief to Ghana, Stéphane Roudet, noted that, “Parameters to be used in external debt restructuring programme is solely a sovereign decision, it is for the government to decide on that.”
