Ghana approves $2.8bn debt relief deal with 25 creditor nations

Ghana’s parliament approved a $2.8 billion debt restructuring deal late Tuesday with 25 creditor nations, including China and France, aiding disbursements under an IMF bailout programme to alleviate the country’s worst economic crisis in decades. The West African nation, the world’s second-largest cocoa producer, signed a memorandum of understanding with its creditors in January after defaulting on most of its external debt in December 2022. The 25 participating creditor countries also include the United States, Germany, and the United Kingdom, demonstrating broad international support for Ghana’s economic recovery. The International Monetary Fund (IMF) approved a $3billion, three-year bailout for Ghana in May 2023 that helped stabilise Ghana’s economy and led to a Fitch rating revision.
“The terms of the debt treatment offer a debt service relief of $2.8 billion during the Fund-supported programme period (2023-2026),” a parliamentary report seen by Reuters said. Under the restructuring terms, debt service payments due between December 20, 2022, and December 31, 2026, will be rescheduled, capitalised, and repaid from 2039 to 2043, delaying repayments by over 15 years, the report said. The Official Creditor Committee set interest rates at 1% to 3% to capitalise rescheduled amounts, depending on the original contractual rate, offering Ghana’s treasury savings below market levels, the report said.
“The Committee noted that the debt restructuring was critical in supporting government to restore and sustain macroeconomic stability and debt sustainability,” the report concluded, with lawmakers unanimously recommending approval. Ghana continues negotiations with commercial creditors to complete its debt restructuring.