Ghana’s bilateral lenders through the Official Creditor Committee (OCC) have approved government’s deal with Eurobond holders on proposed terms to restructure about $13.1 billion debt.

The Ministry of Finance in a statement released on July 8, 2024 announced that “it has received a formal confirmation from its OCC that the Agreement in Principle reached with representatives of Eurobond holders is consistent with the Comparability of Treatment principle”.

This is coming after the government earlier this month, announced that it has reached an “Agreement In Principle” with the Eurobond holders to restructure the $13.1 billion debt owed the bondholders.

The move is coming at a time that the International Monetary Fund (IMF) has also said the deal with the bondholders is in line with the Fund programme to enable the country reach sustainable debt levels by 2028. 

This was after the IMF board met to pass Ghana on the second review under the programme.

The Executive Board in a statement noted that “The agreement on the debt treatment is consistent with the programme parameters, provided the financing assurances are necessary for the second review under the ECF Arrangement to be completed”.

Background

Under the OCC Framework for debt restructuring, there must be a Comparable Treatment of Ghana’s Debts.

This is to ensure that, whatever terms that Government of Ghana reaches with the bilateral creditors, the same should be extended to other creditors.

The Ministry of Finance was therefore required to send the terms reach under the agreement with the bilateral creditors, to the official creditors for their acceptance.

What’s next for Government?

Based on the development, the Ministry of Finance can now go ahead and launch the “Debt Exchange Programme” for the Eurobond Holders to restructure the debt.

However, the bondholders must first move to fully accept the offer, despite the Agreement in Principle reached.

The Minister of Finance Dr. Mohammed Amin Adam at a recent press conference revealed that the government is hoping to launch the offer for the Eurobond Holders in July 2024 and should end in September.

Some market analysts have argued that the current challenges with the Ghana Cedi, can be linked to delays in signing a deal with the Eurobond Holders on restructuring the $13.1 billion debt.