Ghana wins debt moratorium until 2026 from official creditors.
Ghana has successfully negotiated a moratorium with official creditors, deferring debt payments through May 2026. The West African nation also anticipates finalizing a deal with eurobond investors to restructure its $13 billion debt by the end of March. Finance Minister Ken Ofori-Atta provided details of the agreement, revealing that the $5.4 billion bilateral obligations would be repaid in two tranches, 16 and 17 years from now. This pact with official creditors is expected to bolster confidence for restructuring eurobond debt.
Key Points:
- Bilateral Obligations: Ghana’s agreement with official creditors means debt payments due from 2023 will be repaid in 2039 and 2040, and those due in 2024 will be repaid in 2040 and 2041.
- Eurobond Performance: Ghana’s eurobonds were among the top performers, with bonds due in 2027 experiencing an extended gain, rising to 45.40 cents on the dollar. The positive trend is attributed to increased confidence resulting from the moratorium with official creditors.
- Global Perception: Ofori-Atta emphasized a global acknowledgment that Ghana has fulfilled its part, creating urgency in talks with eurobond investors. The debt forbearance aligns with Ghana’s IMF program, concluding in May 2026.
- Swift Restructuring: Ghana’s debt restructuring has been recognized as one of the quickest under the G20 Common Framework for Debt Treatment, with the finalized pact allowing negotiations with commercial lenders to proceed.
- Influence on Eurobond Terms: The terms of the agreement with official creditors will influence talks with eurobond investors, impacting the proposed haircut and issuance of new instruments.
- IMF Disbursement: The agreement facilitates a second disbursement of $600 million from the IMF and unlocks around $550 million from the World Bank, supporting Ghana’s economic recovery efforts.
Ghana’s successful debt restructuring efforts provide a model for other nations, with Ethiopia and Zambia also exploring debt restructuring under the G20 Common Framework. The agreed moratorium and progress with eurobond negotiations signify a positive trajectory for Ghana’s economic recovery.