President Akufo-Addo in July 2022 directed the Finance Minister, Ken Ofori-Atta, to begin formal engagements with the IMF for fund support.
Ghana is in the process of requesting debt relief through the G20 Common Framework programme, despite only poor nations being eligible for it.
The G-20 group of leading economies had agreed to a debt framework to help countries pursue debt restructuring or forgiveness, building off of its Debt Service Suspension Initiative and recognizing that some nations may need additional relief.
The G-20 comprises 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom and United States) and the European Union.
Ghana’s public debt stock hit ¢467.4 billion ($47.7 billion) in September 2022, of which about $4 billion was bilateral. $1.9 billion was held by Paris Club countries and $1.7 billion by China.
President Nana Akufo-Addo in July 2022 directed the Finance Minister, Ken Ofori-Atta, to begin formal engagements with the IMF for fund support.
Reuters reported that Ghana has sought reassurances that the negotiations can be expedited before proceeding.
According to the report, Ghana had reached out to the Paris Club of creditor countries in December 2022 to ask for assurances that the Common Framework process, set up by the Group of 20 leading economies in 2020 in response to COVID-19, could be expedited.
If the assurances are favourable, the government would quickly sign onto the Common Framework, a Reuters source revealed on condition of anonymity.
A Paris Club official told Reuters that the group had received a letter from Ghana’s government, but declined to give further detail.
Another source with knowledge of Ghana’s debt restructuring said it was hard to see any other outcome for Ghana than signing up to the Common Framework as they have left themselves no other options.
A third source, Reuters said, who is familiar with the thinking of the IMF, said Ghana going through the Common Framework programme was under discussion and the most probable outcome, as well as the preferred option for the Paris Club.
Only poorer nations are eligible to request a Common Framework programme.
On the other hand, a country aiming to restructure its debt can also do so by negotiating individually with each creditor.
The Common Framework, designed to allow for speedy debt reworks, has been widely criticised for its glacial progress.
Chad, Ethiopia and Zambia signed up in early 2021. While Chad secured a deal with creditors in November, Zambia is still locked in talks. Ethiopia’s progress was held up by civil war.