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Ghana has agreed a memorandum of understanding (MoU) with its bilateral creditors, including China and France, to restructure US$5,4 billion of debt, two government sources said on Friday, one-and-a-half years after the West African country defaulted.
The MoU paves the way for the executive board of the International Monetary Fund (IMF) to approve the disbursement of US$360 million under Ghana’s US$3 billion, three-year bailout programme, which is expected next month. Once signed, the agreement would form the basis of a deal to restructure loans its official creditors, including China and France under the Paris Club of creditors, agreed in January.
Ghana was the second country in Africa to default on most of its US$30 billion external debt during the pandemic as the exporter of gold, cocoa and oil battled to emerge from its worst economic crisis in a generation. The first country was Zambia.
Ghana’s economy has since started to recover, with inflation easing from 54,1 percent in December 2022 to 25 percent in April 2024 and 2023 growth of 2,9 percent exceeding the IMF’s 2,3 percent.
Together with Zambia and Ethiopia, the world’s second-biggest cocoa producer is reworking its debt under the G20 Common Framework, a process set up during the pandemic to speed up debt overhauls.
However, progress has been slow, holding back the countries’ economic recoveries and access to much needed overseas loans, aid and investment.
The IMF declared Ghana’s debt unsustainable in its Debt Sustainability Analysis (DSA) and is aiming for the country to restore itself to a “moderate” risk of debt distress by 2028. ‑ CNBC Africa
Online Reporter