The report stated that it anticipates Ghana to secure restructuring agreements on its public external debt during 2023-24, involving official and private creditors alike.
EIU cites prolonged debt restructuring negotiation obstructing Ghana's bailout approval
The Economist Intelligence Unit (EIU) has reported that Ghana's bailout relief program seeking approval from the IMF board is expected to delay citing the prolonged debt restructuring negotiations and the involvement of other stakeholders.
“the conclusion of a domestic debt-swap operation in February and increasing international attention on speeding up external debt restructurings, our core forecast remains that the IMF program will be approved by mid-2023.”
“We expect Ghana to secure restructuring agreements on its public external debt during 2023-24, 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 program”.
“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,”
The EIU further warned that macroeconomic instability and a public debt crisis will weigh on Ghana’s business environment and its ambitions to become a West African trading hub
Ghana hoped to secure a bailout relief from the IMF by March this year, however, debt restructuring needs to be agreed upon with Ghana’s external creditors before the IMF’s Executive Board can sign off on the ECF.
Meanwhile, Finance Minister, Ken Ofori-Atta, earlier this year indicated that Ghana is likely to receive the International Monetary Fund’s (IMF) Board approval for a $3 billion bailout by the close of May 2023.
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or: