The Economist Intelligence Unit (EIU) is warning that the International Monetary Fund board approval for Ghana will be delayed owing to prolonged external debt-restructuring negotiations, given the involvement of multiple stakeholders in the process.

In its 2023 Country Report on Ghana, the UK-based firm said it expects Ghana to secure restructuring agreements on its public external debt during 2023-2024, involving official and private creditors alike.

This will include a combination of write-offs, maturity extensions and reductions in interest rates.

“We expect official creditors to agree to a deal in 2023, and this, combined with the domestic debt restructuring that has already been secured, should provide enough reassurance to reduce Ghana's risk of debt distress and allow the IMF to approve the agreed programme”.

“However, there is a material risk that IMF board approval will be delayed owing to prolonged external debt-restructuring negotiations, given the involvement of multiple stakeholders in the process”, it cautioned.

Already, there had been mixed expectations of the IMF support programme by May 2023.

Ghana first requested an IMF extended credit facility (ECF) programme in early July 2022 against a backdrop of unsustainable debt levels, soaring debt-service costs, a severely weakened currency and large twin fiscal and current account deficits.

The local-currency debt swap that was announced by the government in early December 2022, and confirmation of plans to launch an external debt-restructuring programme, paved the way for the government to reach a staff-level agreement with the IMF for a three-year, $3 billion ECF arrangement on December 12, 2022.

Soon afterwards, in mid-December, the country announced the suspension of payments on most of its external debt, setting the stage for a restructuring process.