IMF board to review Ghana $600 million loan payout on Friday

By Jorgelina do Rosario and Maxwell Akalaare Adombila

LONDON/ACCRA (Reuters) -The International Monetary Fund (IMF) executive board is due to meet on Friday to consider the first review of Ghana’s $3 billion rescue loan programme, a spokesperson said by email on Monday.

Board sign off of the review would unlock a $600 million disbursement. Such approvals are usually seen as a formality once a meeting date has been agreed.

Reuters earlier reported the meeting date, according to three sources familiar with the matter, after the cocoa, gold and oil producing country reached an agreement to restructure $5.4 billion of official creditor debt.

Ghana struck the deal with its bilateral lenders, including China and France, late last week, a key step to unlocking the second tranche of IMF funding.

Ghana’s finance ministry did not immediately reply to a request for comment.

The West African country defaulted on most external debt in December 2022 after servicing costs soared.

It also needs to reach a relief deal with private holders of about $13 billion in international bonds.

The bonds rose almost 1 cent on the dollar on Monday, with the 2042 maturity up the most, climbing 0.85 cents to 43.12 cents, its highest level since early November.

“Recently, China encouraged all parties to overcome technical difficulties and narrow differences, and finally led all parties to reach a basic consensus on Ghana’s debt settlement plan… on January 8,” Chinese Foreign Ministry spokesperson Mao Ning said on Monday.

Some members of the Official Creditor Committee, which is co-chaired by China and France, are still “going through their internal procedures,” she told reporters at a regular news briefing.

Ghana is aiming to restructure $20 billion of external debt, which totalled about $30 billion at the end of 2022, under the Common Framework, a debt restructuring process set up by the G20 countries during the COVID-19 pandemic. It has targeted cutting $10.5 billion from payments due between 2023-2026.

The IMF second tranche payout, once signed off, should also trigger $550 million in additional World Bank funding, Ghana’s finance ministry said on Friday.

(Reporting by Jorgelina do Rosario and Maxwell Akalaare Adombila, Additional reporting by Liz Lee in Beijing and Marc Jones in London, Writing and additional reporting by Rachel Savage, Editing by Karin Strohecker, Andrew Cawthorne, Bernadette Baum and Sharon Singleton)