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Ghana's debt dilemma: More needed for third tranche release - IMF

Ghana has reached a significant milestone in its debt restructuring journey by striking a Staff-Level Agreement with the International Monetary Fund (IMF) for the second review of the Extended Credit Facility.

IMF-Boss-and-Akufo-Addo

However, the country still faces a significant hurdle in securing the planned $360 million disbursement from the IMF.

The IMF requires Ghana to obtain financial assurances from external creditors before releasing the funds. This means that Ghana must finalize a Memorandum of Understanding (MoU) for debt treatment with its official bilateral creditors, aligning with the program parameters set by the IMF.

Stéphane Roudet, the IMF Mission Chief for Ghana, emphasized the importance of this agreement, stating that it would provide the necessary financing assurances for the IMF's Executive Board to consider the agreement.

The IMF has stressed that reaching an agreement on a debt treatment MoU is crucial to complete the review and release the funds timely.

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In January 2024, Ghana's Finance Ministry announced that the terms of the approved debt relief plan with official bilateral creditors would be finalized in a Memorandum of Understanding.

This MoU would be implemented through individual bilateral agreements with each member of the Official Creditor Committee.

However, negotiating with each creditor can be a complex and time-consuming process. Comparability of treatment is likely to be a significant issue at every stage of the negotiations, potentially causing delays in the IMF Executive Board's passing of Ghana's second review program.

Despite these challenges, Ghanaian authorities remain optimistic that the necessary financial assurances will be secured. They anticipate fruitful discussions on debt restructuring with external creditors, particularly those in the bilateral sector.

Ghana's debt restructuring journey is not an easy one, but the country remains committed to working towards a more stable and sustainable economic future.

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The Staff-Level Agreement with the IMF is a significant step forward, and securing the necessary financial assurances from external creditors is the next crucial step in obtaining the $360 million disbursement.

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