Ghana’s bilateral creditors have transmitted a conclusive Memorandum of Understanding (MoU) regarding the country’s debt restructuring to the government.
According to sources familiar with the negotiations, JOYBUSINESS has learned about this development in the debt restructuring discussions with the bilateral creditors.
It is understood that the document was dispatched to the government on May 23, 2024, via the Official Creditor Committee.
Each of the 22 member countries of the Official Creditor Committee has individually consented to the proposed terms for restructuring Ghana’s debt.
What is next for Government of Ghana?
The government is anticipated to review the MoU and finalize the agreement with the creditors.
However, the agreement might face delays if the government raises objections to certain provisions.
Impact on Ghana’s programme with IMF and Board in June
This advancement could significantly assist the IMF board in approving Ghana’s review within the program. This would lead to the release of approximately $360 million to the country by the end of June 2024.
In April 2024, Abebe Aemro Selassie, the Director of the African Department at the IMF, disclosed that the organization has obtained the necessary financing assurances from bilateral creditors. This will facilitate the completion of Ghana’s second review.
“To be clear, they have provided financing assurances though, and that remains in effect. And so, we are not envisaging that it will be an issue for our ability to conclude the next review and provide the disbursement that is pending”, Selassie said.
Background
In January 2024, Ghana reached a “tentative agreement” with bilateral creditors as part of the G20 Common Framework debt treatment.
This enabled the country to successfully conclude the first review within the IMF program.
Furthermore, Ghana obtained $600 million along with an additional $300 million from the World Bank through the Development Policy Operation Financing.
This paved the way for the government to move on and work out the MoU between Ghana and its Official Creditor Committee on the terms for restructuring a 5-billion dollar debt.
Finance Minister, Dr Mohammed Amin Adam in April in Washington DC on the sidelines of the IMF Spring Meetings revealed that the bilateral creditors through the Official Creditor Committee have shared the draft document on Ghana’s debt restructuring with members for consideration.
“The Official Creditor Committee has shared the draft document with their members and as soon as they share the document with us and we are okay with that, then we have an agreement.”
IMF MD on Ghana’s deal with Bilateral Creditors
The Managing Director of the IMF, Kristalina Georgieva, during a visit to Ghana later this year, revealed that the country was close to signing an MoU with the bilateral creditors on the restructuring of the debt.
“Ghana is in a good place now, because it has advanced negotiations with the bilateral creditors on restructuring of debts”.
“There are very tangible progress towards signing a Memorandum of Understanding with Bilateral creditors”, she added.