The International Monetary Fund (IMF) has encouraged Ghana to secure a favourable agreement with holders of its Eurobond.
The IMF emphasizes the importance of negotiating terms with bilateral creditors to ensure that the country addresses its unsustainable debt levels effectively without being disadvantaged.
“We need to complete negotiations with private creditors and Eurobond creditors but completely defend the interest of the country. I heard a bit of discussion, but the sooner we do it the better for the country. The sooner we do a great deal the better for the country”, Managing Director of the IMF, Kristalina Georgieva said during a meeting with President Akufo-Addo.
She added that “to do a deal that would reverse progress is not going to be good for the country. You cannot allow the Eurobond creditors to twist your arm because you have done a very painful domestic debt restructuring that has hurt people here. You have agreed to debt principles with official creditors of Ghana under certain conditions”
Ghana has proposed a haircut of approximately 40 per cent with Eurobond holders as part of restructuring its external debt.
However, the IMF boss advised Ghana to pursue a more advantageous deal to prevent a situation similar to that of Zambia.
“The deal with the Eurobonds has to be fair otherwise we risk seeing what happened in Zambia. Last October, I thought the deal was done then the private sector twisted Zambia’s arm and then tried to give them a better deal than the official creditors.”
Ghana is seeking to finalize a roadmap for restructuring approximately $5.4 billion in external debt.
The bilateral lenders, including the governments of China and France, who co-chair the Official Creditor Committee (OCC), hold around a quarter of Ghana’s $20 billion external debt earmarked for restructuring.
The IMF has stated that Ghana is performing well under the programme, with reforms bearing fruit and signs of economic stabilization emerging.
It highlighted that Ghana’s performance under the programme has been strong with all quantitative performance criteria and almost all indicative targets and structural benchmarks being met.