According to a study from the International Monetary Fund (IMF), the government aims to reduce its foreign debt by $10.5 billion between this year and 2026 by engaging its external creditors in debt restructuring.
Bilateral and commercial creditors are included among the external creditors.
On December 19 of last year, the government declared a suspension of debt service on foreign commercial commitments, and since then, negotiations for a debt restructuring have been ongoing.
The government is attempting to restructure its $14 billion in bonds and $13 billion in other commercial debt.
The government is also anticipated to initiate debt restructuring discussions with its bilateral creditors in the coming days in an effort to reorganize following the creation of the Creditor Committee of the Paris Club, sponsored by China.
The Minister of Finance, Ken Ofori-Atta, stated at a press conference yesterday by the IMF in the capital of the United States, Washington, DC, that the government was looking forward to a successful engagement with its bilateral and private creditors in the days to come as the nation worked towards achieving debt sustainability, which would anchor economic stability.
The nation is scheduled to lower its debt-to-gross domestic product (GDP) ratio from the current 93.5% to 55.0% under the terms of the IMF plan.
the way to recovery
The acceptance of Ghana's IMF program, according to Mr. Ofori-Atta, will put the nation on the road to economic recovery.
He said that although the IMF board's approval was far from a magic wand, it was an important first step on the path towards the economy's recovery through bold reforms, inclusive development, and the tenacious pursuit of a growth agenda.
"Undoubtedly, the economic toll on our people from the effects of the global crisis cannot be understated, and we are grateful for the forbearance of all Ghanaians in the wake of the Domestic Debt Exchange Programme, which is a difficult but necessary exercise," the Finance Minister said.
Context
An early release of around $600 million resulted from the IMF Executive Board's approval of a $3 billion bailout to boost Ghana's economic recovery last Wednesday.
As the Bank of Ghana used them to support the Ghana cedi, foreign exchange reserves in Ghana have decreased by approximately 50% from their peak in August 2021. The loan will help restore those reserves.
For the 17th time, the nation turned to the Bretton Woods institution for assistance with the three-year Extended Credit Facility plan.
financial industry
The DDEP had a significant influence on the nation's banks, Mr. Ofori-Atta continued, and the government looked forward to collaborating with them to achieve the necessary financial stability.
He said that $1.5 billion will be invested in the Ghana Financial Stability Fund, which has been formed to help institutions impacted by the DDEP.
"$250 million is coming from the World Bank; $500 million will come from the government; and we're still talking to other development partners about joining in," he said.
According to Mr. Ofori-Atta, the administration is anticipating receiving assistance from the World Bank in the third quarter of this year.
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