Ghana to reengage bondholders- Finance Minister
Ghana will reengage with its international bondholders from next week, finance minister Ken Ofori-Atta said, as the country seeks to build on the momentum of a deal last week to restructure $5.4 billion of official creditor debt.
The West African country will seek to continue discussions after meeting holders of its around $13 billion in outstanding Eurobonds in Marrakech in October, Ofori-Atta said in an interview on the side-lines of the World Economic Forum (WEF) annual meeting.
Officials will also travel to China on 23rd January, he added, China and France co-chair Ghana’s Official Creditor Committee and the agreement reached with the committee was key to unlocking more funding from a $3 billion International Monetary Fund (IMF) rescue loan.
Ghana defaulted on most of its overseas debt in December 2022 after debt servicing costs soared.
It is looking to restructure $20 billion of external debt, which totalled about $30 billion at the end of 2022, and has already restructured most local debt.
Restructuring negotiations last year were a “very difficult, painful process,” but Ghana has “built pretty good momentum”, Ofori-Atta said.
The IMF board is due to meet on Friday to decide on a $600 million disbursement from Ghana’s bailout program.
Getting approval is usually seen as a formality once a meeting has been scheduled, and would unlock funding from other multilateral lenders.
The World Bank was expected to decide on $550 million of “sorely needed” funding on 25th January, Ofori-Atta added.
Ghana is reworking its debts under the Common Framework, a restructuring process set up by the G20 countries during the COVID-19 pandemic that has been criticised for slow results.
Ofori-Atta said the 2022 macroeconomic situation had been “cage rattling”, but was improving, and he pointed to a rise in revenue and a decline in inflation.
The latest data showed consumer inflation had slowed to 23.2% year-on-year in December compared to the more than 50% when the country tipped into default.
Meanwhile growth was running at 3%, more than twice the IMF’s projected rate of 1.2%, Ofori-Atta said.
Reuters/Hauwa M.
Comments are closed.