PREVIEW
Finance minister claims terms offered by creditors will help unlock next tranche of credits from IMF
As critical talks between ministers and official creditors (including the Paris Club and Chinese lenders) on restructuring US$5.4 billion of Ghana's external debt continue this week, a senior IMF official said on 9 January that the fund was optimistic about an agreement which would unlock the next $600 million of financial support as part of the country's $3bn extended fund facility programme.
A deal with official creditors could also unlock $550m of funding from the World Bank. Credits from the IMF and the Bank are conditional on the terms of the debt restructuring and Ghana's ability to meet financial targets.
On 11 January, Ghana's finance minister Ken Ofori-Atta told journalists in Accra that the government was reviewing a draft term sheet from the creditors whose scope was sufficient to meet the IMF's concerns about state finances.
Bloomberg News reported that Ghana's US dollar bonds had gained by 1.3%-1.4% on the finance minister's statement.
Ofori-Atta led the government team in meetings that began on 8 January with the Official Creditor Committee (OCC), co-chaired by the governments of China and France, which holds around 25% of Ghana's $20bn external debt earmarked for restructuring.
Officials have indicated that the talks will also focus on brokering an agreement on a 'cut-off date,' after which new loans from bilateral creditors will not face restructuring. Release of the next tranche of funding from the IMF is contingent on a restructuring deal.
President Nana Addo Dankwa Akufo-Addo's government wants to conclude the debt restructuring and IMF deal early this year. That would give it enough time to engineer some kind of economic feel-good factor ahead of December's general election (AC Vol 65 No 1, The economy will tilt the election).
Vice-President Mahamudu Bawumia is the ruling New Patriotic Party's presidential candidate and is due to launch his campaign later this month in what is shaping up to be a close contest with the opposition's New Democratic Congress (NDC) candidate, former President John Mahama.
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