Ken Ofori-Atta
Ghana will reengage with its international bondholders from next week, finance minister Ken Ofori-Atta told Reuters on Monday, as the country seeks to build on the momentum of a deal last week to restructure $5.4 billion of official creditor debt.
The West African country will seek to continue discussions after meeting holders of its around $13 billion in outstanding Eurobonds in Marrakech in October, Ofori-Atta said in an interview on the sidelines of the World Economic Forum (WEF) annual meeting.
Officials will also travel to China on Jan. 23, he added. China and France co-chair Ghana’s Official Creditor Committee and the agreement reached with the committee was key to unlocking more funding from a $3 billion International Monetary Fund (IMF) rescue loan.
Ghana defaulted on most of its overseas debt in December 2022 after debt servicing costs soared. It is looking to restructure $20 billion of external debt, which totaled about $30 billion at the end of 2022, and has already restructured most local debt.
Restructuring negotiations last year were a “very difficult, painful process,” but Ghana has “built pretty good momentum”, Ofori-Atta said.
The IMF board is due to meet on Friday to decide on a $600 million disbursement from Ghana’s bailout program. Getting approval is usually seen as a formality once a meeting has been scheduled and would unlock funding from other multilateral lenders.
The World Bank was expected to decide on $550 million of “sorely needed” funding on Jan. 25, Ofori-Atta added.
Ghana is reworking its debts under the Common Framework, a restructuring process set up by the G20 countries during the COVID-19 pandemic that has been criticized for slow results.
Ofori-Atta said the 2022 macroeconomic situation had been “cage rattling”, but was improving, and he pointed to a rise in revenue and a decline in inflation.
The latest data showed consumer inflation had slowed to 23.2% year-on-year in December compared to the more than 50% when the country tipped into default.
Meanwhile growth was running at 3%, more than twice the IMF’s projected rate of 1.2%, Ofori-Atta said.