The government has reached an agreement on a Memorandum of Understanding (MoU) with its Official Creditor Committee (OCC), co-chaired by China and France, on the restructuring of some US$13 billion external debt.
“The MoU formalises the agreement in principle reached with Official Creditors in January and marks a crucial step towards Ghana, restoring long-term debt sustainability,” the Ministry of Finance said on Wednesday, June 12.
In a statement copied to the Ghana News Agency, the Minister noted that the financial terms of the agreement, which remained unchanged, would provide significant debt service relief during the Fund-supported programme period.
That, the Ministry said was expected to pave the way for the approval of the second review by the International Monetary Fund (IMF) Executive Board, and the subsequent disbursement of US$360 million third tranche for the country.
This is about the implementation of the US$3bn Extended Credit Facility for the country’s Post-COVID-19 Programme for Economic Growth (PC-PEG) to restore macroeconomic stability and resilience.
The Ministry explained that by signing the agreement, Ghana would have more financial resources, particularly from the World Bank, to be directed towards critical areas such as infrastructure, healthcare, and education.
“The agreement will also bolster the current and ongoing discussions with private creditors, with whom Ghana remains committed to finding a comparable agreement as early as possible,” the statement noted.
“This landmark agreement marks an extraordinary milestone in Ghana’s debt restructuring journey and will further strengthen our ambitious reform agenda with the strong support of our development partners,” Dr Mohammed Amin Adam, Minister of Finance, said.
He expressed the country’s gratitude to all members of the OCC, particularly the Committee’s co-chairs, China and France, for their unwavering commitment to assisting Ghana in resolving its debt issues.
Meanwhile, at a press briefing last Thursday, Julie Kovack, Director of IMF’s Communications Department, indicated that Ghana’s second review would be sent before the Executive Board by the end of June 2024.
“Our aim is to bring the review to the IMF’s Executive Board for approval before the end of June.
This would give Ghana access to US$360 million in financing, bringing the total to about US$1.6 billion in disbursements since May 2023,” she said.
She noted that the country would need steadfast policy and reform implementation to fully and durably restore macroeconomic stability and debt sustainability in Ghana.
