Ghana’s bilateral creditors have forwarded a final Memorandum of Understanding (MoU) on the country’s debt restructuring to government.

This is what JOYBUSINESS has picked up from persons with knowledge of the debt restructuring negotiations with the bilateral creditors.

JOYBUSINESS understands that the document was sent on May 23, 2024, through the Official Creditor Committee to government.

All the 22 member countries of the Official Creditor Committee have all at the individual level agreed to the proposed terms on the restructuring of the debt owed by Ghana.

What is next for Government of Ghana?

Government is expected to go through the MoU and sign the agreement with the creditors.

The agreement could however delay if government raises objections with some of the provisions.

Impact on Ghana’s programme with IMF and Board in June 

The development could go a long way to aid the IMF board in passing Ghana’s review under the programme. This will result in the disbursement of some $360 million to the country by June ending 2024.  

The Director of the African Department of the IMF, Abebe Aemro Selassie in April 2024, revealed that it has secured the needed financing assurance from bilateral creditors that will help to conclude the second review for Ghana.

“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

Ghana in January 2024, secured “an agreement in principle” with the bilateral creditors under the G20 Common Framework debt treatment.

This helped the country in completing the first review under the IMF programme.

Ghana received $600 million in addition to some $300 million from the World Bank under 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.