In a significant milestone for Ghana's economic recovery, the government of the Republic of Ghana has announced that it has successfully reached an agreement with its official creditors under the G20 Common Framework.
The agreement, which goes beyond the Debt Service Suspension Initiative, marks a crucial step toward restoring Ghana's long-term debt sustainability.
"The Government of the Republic of Ghana announces that it has reached an agreement with its Official Creditors under the G20 Common Framework, on a comprehensive Debt Treatment Beyond the Debt Service Suspension Initiative," the ministry said.
The announcement comes following the completion of the Domestic Debt Exchange Programme (DDEP) in 2023, a key element in Ghana's efforts to manage its debt.
The comprehensive debt treatment agreement with official creditors is expected to provide substantial flow relief during the program period, enabling the allocation of additional financial resources for crucial public investments, particularly in healthcare, education, and infrastructure development.
The agreement with official creditors is a significant step towards obtaining the approval of the first review of the fund-supported program by the IMF Executive Board. This approval will pave the way for the disbursement of the next tranche of IMF financing amounting to US$600 million.
The IMF Board Approval is also expected to trigger the World Bank Board's consideration of US$300 million Development Policy Operation (DPO) financing.
Additionally, the World Bank is poised to support the Ghana Financial Stability Fund with US$250 million, aiming to address the impact of the Domestic Debt Exchange Programme (DDEP) on the financial sector.
The terms of the agreed debt treatment will be formalized in a Memorandum of Understanding between Ghana and Official Creditors.
These terms will then be implemented through bilateral agreements with each member of the Official Creditor Committee. The government expressed confidence in prompt implementation and looks forward to further engagement with Official Creditors to finalize the agreed terms.
Ghana's economic indicators, according to the ministry, are demonstrating positive strides, with notable achievements including a decline in inflation to 23.2% in December 2023 from 54.2% in December 2022.
The Ghana cedi has shown relative strength, with a marginal depreciation of 7.2% between February and December 2023, compared to 28.4% during the same period in 2022. The overall real GDP growth for the first three quarters of 2023 stands at 2.8%, surpassing the initial GDP growth target of 1.5% for the year.
The agreement with official creditors is expected to bolster ongoing engagements with Ghana's commercial creditors, including bondholders.
The government remains committed to reaching an agreement with commercial creditors as soon as possible. The Ministry of Finance reiterated its dedication to restoring Ghana's long-term debt sustainability and strengthening macroeconomic stability.
Read the full statement by the Ministry of Finance below:
GA
File photo of Ministry of Finance