GHANA’S Finance Minister voiced confidence on Saturday that the country would eventually strike a deal with international bondholders to restructure $13bn of debt, amidst ongoing efforts to navigate its deepest economic crisis in decades. This statement came as the IMF announced a successful review of its loan programme with Ghana, highlighting positive strides in the nation’s economic recovery.
The West African nation has been diligently working on overhauling its debt burden, leveraging a $3bn IMF programme to steer itself out of economic turmoil. The IMF’s recent endorsement of a staff-level agreement on the second review of the programme signals a significant milestone, poised to unlock a $360 million tranche once Ghana fulfils financing assurances tied to a prior agreement to restructure $5.4bn of loans with official creditors.
While negotiations with international bondholders continue, Ghana’s Finance Minister Mohammed Amin Adam expressed optimism about the progress made thus far, though refraining from providing a specific timeline. ‘Negotiations are ongoing. We’ve been more aggressive over the last two months… We are very confident that if things go the way they are, we certainly will reach a deal at some point,’ he stated during a joint news conference with IMF’s Ghana mission chief, Stephane Roudet.
The impending expiration of a non-disclosure agreement linked to the talks adds urgency to the situation, highlighting the critical juncture in Ghana’s debt restructuring efforts.
Ghana’s reliance on the IMF for financial support dates back to 2022 when escalating debt costs and soaring inflation prompted the country to default on a significant portion of its $30 billion external debt. The IMF’s evaluation of Ghana’s performance under the programme has been largely positive, with Roudet commending the authorities’ steadfast policy and reform initiatives aimed at restoring macroeconomic stability and debt sustainability.
‘In other words, the programme is working,” Roudet affirmed, underscoring the tangible progress achieved through Ghana’s concerted efforts.
Despite challenges, Ghana has seen a notable reduction in inflation, dropping from a peak of 54 percent in 2022 to 25.8 percent as of March. Governor Ernest Addison of the central bank remains optimistic about further improvement, projecting inflation to hover around 15 percent by the end of 2024, notwithstanding recent disinflationary trends.
Looking ahead, Addison emphasized the IMF’s flexibility in accommodating evolving dynamics within the Ghanaian economy, citing the country’s better-than-expected inflation performance as a testament to the need for adaptive policy measures.
Once the latest tranche is disbursed, the IMF will have provided approximately $1.56bn under the programme since May 2023, marking a significant contribution to Ghana’s ongoing economic recovery efforts.
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