According to sources cited by Reuters, Ghana's official creditors are ready to provide financial guarantees and establish a committee that would be co-chaired by France and China. These actions are crucial for the country to get a $3 billion International Monetary Fund (IMF) loan.
According to people with direct knowledge of the process who spoke on the condition of anonymity, the nation's bilateral lenders are anticipated to formally provide funding assurances as early as this Friday, confirming that they will then begin discussions to offer Ghana the relief required to make its debt manageable.
According to one of the individuals, the pledges could make it easier for the IMF executive board to accept the $3 billion loan next week.
IMF representative Julie Kozack stated during a news conference on Thursday that the Fund is hoping that its executive board, after sufficient formal bilateral creditor assurances have been obtained, will swiftly take into consideration the Ghana program. In December, the staff approved the deal.
We have witnessed significant progress in the creditors' fulfillment of these funding promises, and Kozack expressed optimism that this progress may be made quickly.
Requests for feedback from the finance ministries of China and Ghana were not immediately fulfilled. The Paris Club chose not to respond.
The West African country, which defaulted on the majority of its foreign debt in December and finished an internal debt swap in February, is enduring its worst economic crisis in a generation.
The $3 billion rescue plan was approved by IMF staff in December, but the fund's board must first receive financial guarantees from official creditors.
Ghana, whose finances were already under pressure due to COVID-19 and Russia's invasion of Ukraine, risks debt restructuring along with other smaller, riskier developing market nations like Zambia and Sri Lanka.
According to government statistics, the nation is discussing a restructuring of its foreign debt under the Common Framework framework of the Group of 20. Of the $5.4 billion in debt owed to official creditors, this amount is eligible for restructuring. The country is also negotiating a restructuring of its $14.6 billion debt to foreign private creditors.
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