Ghana has commenced external debt restructuring discussions with its external creditors, Finance Chief Ken Ofori-Atta has said.
Making the disclosure during a joint press briefing by the Finance Ministry and the IMF, Mr Ofori-Atta averred discussions with external creditors on a proposed external debt restructuring programme will intensify this week.
According to the Finance Chief, the external debt restructuring programme will affect both bilateral and individual creditors.
“We have already started external debt restructuring discussions with external creditors, but we will kick off strongly this week,” said Mr Ofori-Atta.
Touching on the parameters to be used in the creation and implementation of the external debt restructuring programme, IMF Mission Chief to Ghana, Stéphane Roudet, noted that, “Parameters to be used in external debt restructuring programme is solely a sovereign decision, it is for the government to decide on that.”
An external debt restructuring programme is likely to cause an uproar among external creditors same as it did among domestic creditors when the DDEP was announced by government on December 5, 2023.
An unfavorable debt restructuring programme for external creditors, is likely to severely impact Ghana’s chances of raising long term capital from the international debt market.
Currently, Ghana’s debt to external creditors is in the range of $28bn.
Meanwhile, approval of Ghana’s $3bn ECF programme by the IMF Board is dependent on a number of factors.
Speaking at a press briefing on Tuesday, December 13, 2022, IMF Mission Chief to Ghana, Stéphane Roudet, noted that approval of the ECF programme for Ghana by the IMF Board will be dependent on support for government’s Domestic Debt Exchange Programme (DDEP) by creditors (both external and domestic) as well as the ability of the programme to restore Ghana’s debt to a sustainable level.
“Assurances from Ghana’s creditors that they will support the Domestic Debt Exchange Programme and the ability of the programme to sufficiently restore debt sustainability, will the be among the major reasons for which the IMF Board will approve the ECF programme,” he said.
Speaking further, Mr Roudet noted that the IMF is supportive of the DDEP along with all policies being put in place to ensure the success of the debt exchange programme.
“We support all policies and measures being implemented by the government to ensure the success of the DDEP as it will help restore and enhance debt sustainability,” he added
Source: norvanreports