The government has submitted a proposal to its official creditors regarding the restructuring of its external debt.
Although the ‘working proposal’ is not legally binding, according to Reuters, it marks a significant move by the government to engage the Official Creditor Committee, which includes the Paris Club formed in May 2023, in discussions about the country’s debt restructuring program.
This submission initiates a more comprehensive negotiation process that is expected to involve the exchange of several proposals.
It highlights the government’s participation in the Common Framework process, established by the G20 in 2020, aimed at facilitating joint negotiations for sovereign debt restructuring involving newer creditor nations like China.
Ghana is hoping to cut about $10 billion out of a total of $52 billion over the next three years to successfully implement the International Monetary Fund programme.
The country’s debt to China and members of the Paris Club is estimated at $5.4 billion. As of December 2022, the total external debt stood at $28.9 billion.
It has already completed a Domestic Debt Exchange Programme in February 2023 in which about 65% of bondholders took part in the exercise.