Ghana minister confident of official creditor debt deal by end of next week

By Maxwell Akalaare Adombila and Christian Akorlie

ACCRA (Reuters) -Ghana’s Finance Minister Ken Ofori-Atta said on Thursday that he was confident the country would reach a restructuring deal with its official creditors by the end of next week.

The “cut-off date” – the date after which new loans will not be restructured – and the comparability of treatment between creditors are the major outstanding issues, Ofori-Atta told reporters, adding that any cut-off date would be fine for Ghana.

No single creditor, whose committee is co-chaired by China and France, is holding up the debt restructuring, with all concerned about their own interests, he said.

Ghana defaulted on most of its external debts in December 2022, after it was locked out of international capital markets and its debt costs spiralled out of control, exacerbating an economic crisis in which its currency slid and inflation soared.

It needs to reach a restructuring deal with its official creditors to secure the International Monetary Fund executive board’s approval for the next $600 million payout from a $3 billion rescue loan.

“My hope is that by the end of next week we’ll have what we need,” Ofori-Atta said. “One of the key issues is the cut-off date and ensuring that there is comparability of treatment.”

The official creditors, who hold about $5.4 billion of Ghana’s $20 billion external debt that is being restructured, were considering dates in March 2020 and December 2022, Reuters reported in September.

While Dec. 31, 2022 is close to when Ghana defaulted, March 24, 2020 was being considered as a cut-off date because that was when the G20 introduced its debt service suspension initiative (DSSI) to help the world’s poorest countries cope with the fallout of the COVID-19 crisis, two sources said at the time. Ghana did not participate in the DSSI.

“We can manage either way. So the issue is (for) the membership of the OCC to get comfortable with how it impacts them,” Ofori-Atta said when asked if there was a date that Ghana preferred.

“Everybody is looking at comparability of treatment and China and France, certainly are the (official creditor committee) co-chairs, so they have a good impact on what will happen.”

Ghana is restructuring its debt under the G20 Common Framework platform, which has been criticised for delays and divisions between creditors groups. Zambia’s process was derailed earlier this month when its official creditors rejected a deal the country reached with international bondholders.

Ghana owes about $13 billion to overseas bondholders. Good discussions are ongoing with them, Ofori-Atta said.

(Reporting by Maxwell Akalaare Adombila and Christian AkorlieWriting by Sofia Christensen and Rachel SavageEditing by Alexander Winning and Christina Fincher)