Government has started formal negotiations with private creditors and Eurobond holders on restructuring their debts.

The engagements began today, October 16, 2023, in London and it's likely to end this weekend.

The engagements are jointly led by Finance Minister, Ken Ofori-Atta and the Governor of the Bank of Ghana, Dr. Ernest Addison.

They are joined by the technical team from the Ministry of Finance and Bank of Ghana.

The Finance Minister disclosed this on a yet-to-aired PM Express Business Edition recorded in Marrakech Morocco with host George Wiafe.

The move, according to him, is part of a broader strategy to “Close the Page” to reaching an agreement with all the actors to restructure Ghana’s external debt. 

The Finance Minister revealed that “we are optimistic that before the close of this year, we should have reached a deal with the private and commercial creditors as well as Eurobond holders”

What is on the table for private creditors?

The Finance Minister said government has made some proposals to these private and commercial creditors that should convince them to accept the offer on the table.

“We believe that government will be in a  better position to meet all the obligations due to the investors and commercial creditors, based on the reforms that Ghana has undertaken".

“And this should convince them to accept our offer,“ he added.

Ken Ofori-Atta argued that what will also convince these investors to accept an offer is the reforms that Ghana has undertaken under the Fund Programme and how the country has performed during the first programme review.

“This should convince them that the outlook is good,“ he said.

He also believes that government’s commitment to grow the economy and embark on programmes that will help improve productivity may play a very important role.

“At the end of the day, what are the investors looking out, a country that is in a position to meet its financial obligations,” he added.

“How do we restructure the economy in a way that government will be in a better position to honour the commitments of these investors going forward,” the Minister maintained.

Bilateral Debt Exchange negotiations and meeting IMF deadline

The Finance Minister disclosed that government is optimistic that the bilateral creditors will “Come through and sign up to an MoU to the Bilateral Debt Restructuring in the coming days."

Zambia this week announced that it has secured a Memorandum of Understanding from China and other development partners under the G20 Framework. 

But responding to this development, the Finance Minister noted, “This should give us some confidence that, Ghana is indeed on track to secure similar assurance under the framework”

“This deal with the external creditors should help Ghana secure the much talked about second tranche of funds from the IMF by next month,” the minister added.

Business Environment and Concerns of Ghanaians about the Economy

There have been concerns about the impact of Ghana’s Programme with the IMF regarding the marginal stability that the economy is witnessing, and how it is impacting Ghanaians.

Some have argued that things are hard while some have maintained that they are struggling to “make a living”.

However, the Finance Minister insists parallel programmes are being instituted to ensure that the expected shocks on the economy and Ghanaians are minimised.

The Finance Minister also talked about the growth and jobs programme that will be rolled out in the 2024 Budget, which will come up with some incentives to support the private sector and startups and the youth in the country. 

“We are also reviewing the You Start Programme to inject more resources into it and deal with the challenge of access to funding facing many startups in the country “the Minister added.

“We believe that it will take some time, but very soon Ghanaians will start feeling the impact of this stability that we are experiencing,“ Ken Ofori-Atta added.

All these initiatives are aimed at helping Ghanaians who are going through a lot of challenges as a result of the current phase the economy is going through, the minister added.

On the economic outlook, the minister argued that reducing the inflation rate and stabilising the economy, will go a long way to improve the environment for enterprises in the country.

Rationalisation of government programmes

The Finance Minister also announced that government has come very far in the rationalisation of some social intervention programmes.

This will include the Free SHS programme, School Feeding Programme and Livelihood and Empowerment Programme.

According to him, based on these rationalisations that Ghana was able to pass the first programme review by the IMF just last week.