The approval of a programme for Ghana by the Board of the International Monetary Fund is expected to come off at the earliest in January 2023, Singapore-based Redd Intelligence has stated.

However, it says, in the worst case scenario, the IMF Board approval will happen latest in March 2023.

In its latest analysis on Ghana’s debt restructuring, the market and research firm said “the SLA  [Staff-Level Agreement] is in good shape and the end-December target looks realistic. IMF board approval of the program is not expected until January [2023] at the earliest, after which the DSA [Debt Sustainability Analysis] parameters will become public”.

The Government of Ghana is aiming to reduce its interest payments on external debt to not more than 18% of annual revenue by 2028.

Redd Intelligence said the local debt restructuring should be viewed positively by Eurobond holders for two main reasons.

“It addresses one of the key constraints in Ghana’s Debt Sustainability Analysis – debt service – and it shows that the government is serious about achieving external debt restructuring in the first half of 2023. The exercise is expected to shrink Ghana’s extremely high 70%-100% interest-to-revenue ratio, reduce gross financing needs, and, coming before the external debt exercise, it addresses an important concern for international creditors”.

Government launched a debt exchange programme December 5, 2022.

According to the programme, the government is offering local holders the option to exchange bonds totaling some $10.5 billion equivalent into four new issues with maturities in 2027, 2029, 2032, and 2037.

The bonds will pay zero interest in 2023, 5% in 2024 and then 10% from 2025 onwards. There will however be no cut in the principal amount.

All the new bonds have an amortizing structure.