In a significant development, the International Monetary Fund (IMF) has indicated its readiness to Ghana for the disbursement of the $600 million second tranche of the $3 billion IMF credit facility on Friday, January 19, 2024. This positive outlook follows Ghana’s successful negotiation of a debt treatment agreement with the Official Creditor Committee (OCC), leading to the restructuring of a substantial portion of its debt.
The OCC, co-chaired by China and France, presented a draft term sheet to the Ghanaian government and the International Monetary Fund on January 12, 2024. The agreement aims to restructure $2.5 billion out of a total exposure of $5.1 billion owed to bilateral creditors.
Upon approval of the draft term sheet, a memorandum of understanding will be established, paving the way for the IMF’s management to seek approval from the Board for the release of the anticipated second tranche.
Finance Minister, Ken Ofori-Atta expressed optimism about the Board’s approval, citing the discipline exhibited by Ghana throughout the negotiation process.
He emphasized, “The draft term sheet from the OCC means, in effect, that the co-chairs, France and China, working with members of the Official Creditor Committee, had come to a broad agreement on the way forward. That really signals to the Fund that they can proceed to have the board meeting, which will lead to the release of the $600 million, which we negotiated with the Fund.”
In a move that underscores the progress made by Ghana, the cutoff date for the restructuring of the $2.5 billion has been extended from March 2022 to December 2022.
The protracted negotiations with Paris Club members and bilateral creditors have faced delays, primarily attributed to the low level of cooperation from China and France, both of whom presented new conditions. Despite the challenges, Ghana has persevered in reaching an agreement that has garnered the approval of the IMF.
IMF Managing Director, Kristalina Georgieva took to social media to express her satisfaction with the development. In a tweet, she stated, “Great news on Ghana reaching an agreement with its official bilateral creditors on a debt treatment. This clears the path for our Board to consider Ghana’s first program review and continue providing much-needed support.”
