Ghana yet to receive MoU draft on debt restructuring as Official Creditors share draft among members
Ghana is edging closer to a pivotal juncture in negotiations with its bilateral creditors.
Finance Minister, Dr. Mohammed Amin Adam, has revealed that the Official Creditor Committee has disseminated a preliminary document outlining Ghana’s debt restructuring, awaiting consensus from its members.
Addressing reporters on the sidelines of the IMF/World Bank Spring Meetings in Washington DC, Dr. Amin Adam underscored the significance of this development, hinting at the prospect of an imminent agreement pending approval from the creditors.
“The Official Creditor Committee has shared the draft document with their members, and as soon as they share the document with us and we are okay with that, then we have an agreement,” he affirmed.
Speaking further and touching on the significance of the MoU in the process of the IMF’s approval of the $360m third tranche, Dr. Amin Adam clarified that the International Monetary Fund (IMF) is not insisting on finalized terms with bilateral creditors prior to board evaluation.
Instead, an accord on the Memorandum of Understanding (MOU) suffices to propel the process forward.
“We are very optimistic that we can meet all the conditions needed for IMF to go to the board in June this year,” he added.
Moreover, negotiations with Eurobond holders and commercial creditors have gathered momentum, with the government charting a course toward aligning agreements with Ghana’s Debt Sustainability Analysis under the IMF programme.
Dr. Amin Adam conveyed the Government’s optimism in clinching a deal that meets the Debt Sustainability Analysis criteria.
“Any deal that we reach with these commercial creditors should be in line with Ghana’s Debt Sustainability Analysis, and we are working hard on that.
“We are working to narrow the gap when it comes to what we initially proposed to the creditors,” he posited.
Regarding the proposal made to the bondholders, the Finance Minister divulged specifics of the government’s proposition, which include a 33% discount on the bonds and coupon rates of 5%
“We have provided a 33% discount on bonds and a coupon rate of 5% until 2027, and then we have 6% thereafter, and if you subject this to the threshold, you are supposed to achieve the 55% debt-to-GDP ratio target,” he quipped.
“We need to work hard to ensure that the fresh negotiations fall in line with the debt sustainability analysis,” he emphasized.
As Ghana navigates these pivotal negotiations, stakeholders keenly await the outcome, which could significantly shape the nation’s fiscal trajectory in the coming years.
Ghana is aiming to restructure $13 billion of external debt repayments and interest costs held in bonds by commercial creditors.
