Ghana, creditors agree debt  rework, pave way for IMF cash A general overview of the Makola market, one of the country’s largest trading centres in Accra, Ghana March 26, 2022

ACCRA- Ghana’s finance ministry said on Wednesday it has finalised a pact with the official creditor committee to formalise a debt restructuring deal agreed in January, smoothing the path to a new funding tranche from the International Monetary Fund.

The outlines of the agreement pave the way for the IMF executive board’s approval for a second review of a US$3 billion loan package for Ghana and release of the next tranche of US$360 million.

IMF Managing Director Kristalina Georgieva congratulated Ghana on the deal in a post on social media platform X, and said it would support the second review later this month.

The announcement confirms a Reuters report last week that a memorandum of agreement was about to be formalised.

“The IMF Board’s approval should also trigger more financial assistance from our development partners, particularly the World Bank,” the finance ministry said in a statement.

Ghana is restructuring its debt to help it emerge from its worst economic crisis in a generation after defaulting on much of its overseas debt in 2022 amid soaring servicing costs.

Each creditor nation is now expected to sign the agreement individually, the ministry said, adding it would also bolster ongoing restructuring discussions with private creditors.

Ghana’s sovereign dollar bonds were little changed by 0837 GMT, with most issues trading between 50-51 cents on the dollar, a distressed level that suggests the market expects trims on private debt.

The financial terms of the agreement with official creditors remained unchanged from the deal agreed in January, the ministry said, adding it provided “significant debt service relief” during the period of the IMF-supported programme.

Ghana, the world’s second largest cocoa producer, is also facing cocoa delivery delays due to poor harvests, a move that could cut its income and compound debt distress. – Reuters

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