Ghana, Official Creditor Committee kickstart $5.4bn debt restructuring negotiations today
Ghana’s external debt restructuring negotiation team led by the Finance Minister, Ken Ofori-Atta, will starting today, commence negotiations with the Official Creditor Committee (OCC) co-chaired by China and France.
The negotiations will centre around the restructuring of some $5.4bn in external debts owed to the members of the OCC by Ghana.
The Official Creditor Committee (OCC), hold around a quarter of Ghana’s $20 billion external debt earmarked for restructuring.
The restructuring of the $5.4 billion debt is a key step needed to secure Ghana’s next $600m tranche of funding from the International Monetary Fund.
The meeting between Ghana and the OCC is again expected to focus on an agreement about a “cut-off date” – the date after which new loans from bilateral creditors will not be restructured.
Defining this date has emerged as a stumbling block for Ghana in its debt rework.
Some creditors are said to prefer Dec. 31, 2022, as a cut-off date with Ghana having defaulted earlier that month. However, others pushed for March 24, 2020, because that was when the Group of 20 introduced its debt service suspension initiative (DSSI) to help the world’s poorest countries cope with the fallout of the COVID crisis which Ghana did not participate.
“Ghana is still about cut-off date, but creditors haven’t agreed yet. If the cut-off date is agreed, that means an agreement on debt restructuring is close,” a source said.
Meanwhile, Ghana expects to receive $1.15 billion in funding from the International Monetary Fund and the World Bank by the end of February as bilateral creditors near agreement on the terms of a debt restructuring.
Finance Minister Ken Ofori-Atta is “confident” that official creditors will agree on a memorandum of understanding on the external debt restructuring in today’s meeting.
