Ghana has reached a crucial agreement with bondholders, resulting in a 37% principal haircut equivalent to $4.7 billion in losses. This breakthrough addresses Ghana’s $13 billion external debt burden and follows successful negotiations with official creditors like China and France to restructure $5.4 billion in loans.
In turn, this debt restructuring is key to unlocking additional financial aid from the IMF and access to $600 million under a $3 billion bailout program. The goal is to reduce Ghana’s public debt-to-GDP ratio from 88.1% in 2022 to 55% by 2028, bolstering economic stability and growth.
Part of the G20 Common Framework, Ghana’s debt overhaul is essential for countries hit hard by the COVID-19 pandemic. Engaging in complex talks with various financial entities, this agreement is expected to provide cash flow relief for sustainable economic progress and stability.
These monumental efforts are crucial for restoring debt sustainability, gaining IMF support, and fostering Ghana’s economic recovery and growth. With the next milestone being the IMF’s program review on June 28, successful implementation of these agreements will pave the way for a more resilient and prosperous future for Ghana.