Source: newsthemegh.com
Ghana’s aspirational goals for economic stability in 2024 are in jeopardy due to the slow progress of talks with official creditors on the restructuring of the country’s external debt.
More than a week into the New Year, Ghana is still waiting for a definitive breakthrough in negotiations to restructure its foreign debt, which raises concerns about the International Monetary Fund’s (IMF) crucial $600 million release.
One crucial element in releasing the desperately required money is the absence of a formal agreement from official creditors.
On January 8, 2024, a meeting of bilateral creditors was planned to discuss the amount of debt relief, with a particular emphasis on deciding on a uniform deadline.
Official creditors have not yet commented on the outcome of this significant conference, though.
Ghana wants to renegotiate over $5.4 billion of its bilateral debt as part of its aggressive debt alleviation efforts.
The reason for the postponement of the planned disbursements is that Ghana is having difficulty obtaining the financial guarantees that it needs from foreign creditors in order to release the about $2.2 billion in fiscal space that will be essential for supporting the balance of payments in 2024.
Experts and others familiar with Ghana’s IMF program are growing increasingly concerned about the potential of the program being extended into 2026 due to the country’s failure to secure the necessary financial assurances.
This impending danger might sabotage Ghana’s medium-term ambition to return debt sustainable levels by preventing the country from accessing the full pool of accessible money.
Notably, Ghana has previously requested debt relief from official creditors, mainly the Paris Club.
The last time these kinds of negotiations took place was in May 2002 as part of the HIPC program. The outcome was a rescheduling of the remaining sums over a 23-year period and modifications to Ghana’s debt servicing deadline.