Ghana’s bilateral creditors set to clear way for $3bn IMF bailout

This week, Ghana aims to make progress in restructuring its debt worth $58 billion by having a meeting with its bilateral creditors. The goal of the meeting is to determine if enough debt relief can be provided to unlock a $3 billion IMF bailout.

Finance Minister Ken Ofori-Atta expressed optimism that the creditors would agree to provide enough relief to allow Ghana to access the IMF loan package agreed upon last year. Typically, commitments from bilateral creditors to offer debt relief are the first step in accessing an IMF-backed restructuring programme.

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If Ghana’s debt talks are successful, this could lead to faster resolution of other countries’ debt restructuring in the future. In December, Ghana stopped paying most of its external debts and asked holders of its domestic debt to participate in an exchange that would significantly reduce the cost of debt service.

About 85% of eligible domestic debt holders agreed to participate, according to Ofori-Atta. In contrast, Zambia’s debt restructuring, which is necessary for a $1.3 billion IMF programme, has been stalled due to disagreements among its creditors after it defaulted on its debts in 2020.

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