The Government of Ghana has received a draft Memorandum of Understanding (MoU) from the Official Creditor Committee as of May 23, 2024, according to an announcement by Minister of Finance Dr. Mohammed Amin Adam.
This marks a significant milestone in the country’s external debt restructuring efforts, which are now approaching completion.
“The Government, with support from our Financial and Legal Advisors, will review it to finalise and sign the agreement with the OCC as soon as possible,” the minister said.
Speaking at the newly instituted monthly press briefing on the economy, Dr. Adam reported substantial progress with Eurobond holders, indicating that Ghana is making headway in finalizing its external debt restructuring programme.
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He emphasized that these developments align with the parameters set by the International Monetary Fund (IMF) and reflect ongoing efforts to reach a consensus.
In December 2022, Ghana initiated the restructuring of both its domestic and external debts. While the domestic debt restructuring was completed relatively quickly despite heated protests from affected investors, the external debt restructuring has taken considerably longer period.
This delay has negatively impacted the economy, with many investors and financiers adopting a cautious stance.
Dr. Adam also provided an update on the nation’s economic recovery efforts, highlighting the successful implementation of the International Monetary Fund (IMF) supported Post-COVID-19 Programme for Economic Growth (PC-PEG).
He noted that the second review of the $3 billion IMF-supported PC-PEG, covering the period ending December 2023, concluded successfully on April 13, 2024.
He said Ghana achieved a Staff Level Agreement with the IMF, paving the way for the Executive Board’s consideration in June, which could unlock a third tranche of $360 million.
This would bring total disbursements under the program to $1.56 billion.
The review assessed various performance indicators, showing that Ghana met most Quantitative Performance Criteria and Indicative Targets, and satisfied all but one structural benchmark due by the end of December 2023.
Dr. Adam highlighted several achievements, including maintaining a minimum Net International Reserve of $988.2 million, achieving zero Central Bank borrowing, and implementing structural reforms, such as expanding the Ghana Integrated Financial Management Information System (GIFMIS) infrastructure.
In conclusion, Dr. Adam reaffirmed the government’s commitment to fiscal discipline and economic stability. He praised the resilience shown so far and emphasized the need for continued stakeholder collaboration. The Minister expressed confidence in achieving key targets, such as reducing inflation to 8% by 2025 and restoring debt sustainability by 2028.
As Ghana moves closer to completing its external debt restructuring, the government remains focused on ensuring long-term economic stability and growth through strategic reforms and international cooperation.
