Ghana anticipates “Agreement In Principle” with Official Creditors, Eurobond holders by November and December
Ghana’s Finance Minister, Ken Ofori-Atta, has unveiled a strategic roadmap towards reaching a pivotal agreement with Eurobond holders, shedding light on the nation’s ongoing efforts to manage its debt and achieve fiscal sustainability.
Mr Ofori-Atta revealed that discussions with creditor groups and their representatives have been underway for a significant period, with pivotal scenarios shared by bondholder groups in recent weeks.
These scenarios, as articulated by the Finance Minister, are under meticulous review, with a core objective of achieving a mutually beneficial solution.
“Discussions have been ongoing for some time with creditor groups and their representatives. We have received scenarios from both bondholder groups including scenarios received last week from the international bondholders’ group.
“We are currently reviewing these scenarios and hope to converge towards a solution that respects the need for debt relief and is compliant with the Comparability of Treatment constraints”, remarked the Finance Minister.
It is paramount that any agreement reached respects Ghana’s need for debt relief while adhering to the crucial principle of Comparability of Treatment constraints. Notably, Ghana seeks to align these debt treatments with the stringent benchmarks outlined in the joint International Monetary Fund (IMF) and World Bank Debt Sustainability Framework.
The Finance Chief’s optimism for an agreement in principle with the Official Creditor Committee (OCC) by early November 2023 also underscores the urgency of the situation. The anticipated agreement in principle will pave the way for a Memorandum of Understanding (MoU) to be inked between official creditors and the Republic of Ghana. The MoU will serve as the formal instrument that solidifies the agreement’s financial parameters.
Following the MoU, bilateral agreements will be meticulously forged with each creditor. These agreements will be meticulously crafted to mirror the terms sanctioned by the OCC, thereby representing the finalization of the debt relief agreements with official creditors.
“An agreement in principle on the financial parameters of the bilateral debt treatment is expected to be reached. An MoU is then to be signed between official creditors and the Republic of Ghana, formalizing the agreement in principle on the debt treatment,” added the Finance Minister.
Ghana’s approach signals a resolute commitment to mitigating its debt challenges while upholding international debt management standards. In a financial landscape where sovereign debt concerns are increasingly in the spotlight, Mr Ofori-Atta’s disclosure sheds light on a proactive strategy to navigate complex negotiations and chart a course towards fiscal stability.
