2024-04-15 23:09:36
Ghana has failed to secure a viable debt deal with two groups of bondholders in its effort to restructure $13 billion in international bonds, the government said on Monday.
Formal talks have been suspended for now after the International Monetary Fund indicated the deal would not meet its debt sustainability parameters, the government said in a statement.
“We will regroup to continue negotiations until we reach an agreement that is consistent with the IMF’s debt sustainability goals,” said Finance Minister Mohammed Amin Adam’s office.
He said Ghana had reached a “tentative agreement” with bondholders but that it needed to be adjusted to meet IMF targets.
Ghana has been in formal talks with two groups of bondholders since March 16 – a group of Western asset managers and hedge funds and another that includes regional African banks.
In December 2022, Ghana stopped paying most of its external debt of 30 billion dollars as it entered an economic crisis.
The economy of the world’s second largest cocoa producer has since begun to recover, with growth of 2.9% in 2023, exceeding the IMF’s January forecast of 2.3%.
Regional bondholders believe a deal is possible before the end of the year as the Ghanaian economy is performing better than assumed in the IMF’s original analysis, Samuel Sule, CEO of Renaissance Capital Africa and group financial advisor.
The IMF approved a three-year, $3 billion loan program for Ghana in May 2023, contingent on the government implementing reforms and completing a debt restructuring that the fund considers sustainable.
Ghana – along with Zambia and Ethiopia – is restructuring its debt under the G20 Common Framework, a process created during the COVID-19 pandemic to accelerate debt review.
However, progress has been slow, holding back countries’ economic recovery and access to much-needed foreign loans, aid and investment.
Ghana aims to cut $10.5 billion from its foreign debt payments and interest costs owed between 2023 and 2026. It reached an agreement in principle in January to rework $5.4 billion in loans with official creditors . Any deal with bondholders will have to offer comparable debt relief.
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