Ghana grapples with debt restructuring talks set to meet creditors today

Ghana is officially starting crucial talks with its authorised creditors today, January 8 in order to create a clear plan for the restructuring of its about $5.4 billion in external debt.

The outcome of these talks is not only crucial for Ghana’s financial landscape but is intrinsically tied to the fate of the remaining $2.4 billion from the $3 billion International Monetary Fund (IMF) bailout package.

The Official Creditor Committee (OCC), co-chaired by China and France, represents bilateral lenders holding a significant quarter of Ghana’s $20 billion external debt earmarked for restructuring.

While assurances have been given that negotiations are progressing, a crucial sticking point is the yet-to-be-determined cut-off date for the inclusion of external debt in the restructuring operation.

The Ministry of Finance took a stance in October 2023, urging bilateral creditors, including the governments of China and France, to expedite the agreement on debt relief terms. The objective was to facilitate the smooth implementation of the restructuring plan and enable Ghana to access the much-needed second tranche of the IMF bailout package.

Ghana had previously secured $600 million from the IMF in May 2023, representing the first tranche of the bailout. However, the disbursement of the remaining funds is now contingent on the resolution of the ongoing talks with its bilateral creditors.