Finance Minister, Ken Ofori-Atta, announced on Monday that Ghana is set to reengage with its international bondholders from next week. This move comes on the heels of a successful deal last week to restructure $5.4 billion of official creditor debt.
In an interview on the sidelines of the World Economic Forum (WEF) annual meeting, Ofori-Atta disclosed that Ghana is seeking to build on the positive momentum achieved in the restructuring process.
Ghana will continue discussions with holders of its outstanding Eurobonds, totaling around $13 billion, following the Marrakech meeting in October.
Moreover, officials are scheduled to travel to China on January 23, where discussions with China and France, co-chairs of Ghana’s Official Creditor Committee, will take place. The agreement reached with the committee was pivotal in unlocking additional funding from a $3 billion International Monetary Fund (IMF) rescue loan.
Ghana faced a default on most of its overseas debt in December 2022 due to soaring debt servicing costs. The nation is actively working to restructure $20 billion of external debt, which amounted to approximately $30 billion at the end of 2022. Notably, Ghana has successfully restructured most of its local debt.
Describing last year’s restructuring negotiations as a “very difficult, painful process,” Ofori-Atta expressed optimism about the progress made, stating that Ghana has built significant momentum.
The IMF board is expected to meet on Friday to decide on a $600 million disbursement from Ghana’s bailout program. Approval, which is anticipated as a formality, would unlock funding from other multilateral lenders.
Additionally, the World Bank is set to decide on $550 million of much-needed funding on January 25, according to Ofori-Atta.
Ghana’s debt restructuring is being conducted under the Common Framework, a process established by G20 countries during the COVID-19 pandemic. While the Common Framework has faced criticism for its slow results, Ofori-Atta emphasized that Ghana’s macroeconomic situation in 2022 had been “cage rattling” but is now showing signs of improvement.
He pointed to a rise in revenue and a decline in inflation, with consumer inflation slowing to 23.2% year-on-year in December, compared to more than 50% when the country tipped into default.