Rating agency, Fitch, has emphasised that the Official Creditor Committee (OCC) including the Paris Club and the Ghanaian government will agree on the debt treatment parameters by the end of 2023.

However, it expects the government to conclude an agreement with the private creditors on comparable terms by the middle of 2024. 

“We expect the OCC and authorities to agree on the debt treatment parameters by end-2023, before an agreement with private creditors on comparable terms is expected for mid-2024, paving the way for Ghana moving out of default”.

In its comprehensive analysis of Frontier Markets, Fitch, said the agreements with the two external creditors will pave the way for Ghana to move out of its default position.

Zambia recently reached a deal with its external creditors, allowing for the restructuring of its external debt.

The UK-based rating agency said Zambia’s debt deal gives hope that Frontier Markets' sovereign restructurings could be resolved more quickly going forward.

The International Monetary Fund estimates the financing from external debt restructuring must amount to $10.5 billion between 2023 and 2026.

Ghana was able to obtain approval from the International Monetary Fund Executive Board for a $3 billion Economic Credit Facility arrangement on May 17 2022, following the establishment of the Official Creditor Committee for external debt treatment.

To re-establish debt sustainability, the IMF is requesting a debt reduction of about 30% of Ghana’s public sector external debt at the end of 2022.