Ghana piles in more debt as it expects $1.15 billion inflow from IMF and World Bank by late February

Ghana's President Nana Akufo-Addo addresses participants of the "G20 Investment Summit - German Business and the CwA Countries 2019" on the sidelines of a Compact with Africa (CwA) in Berlin , Germany November 19, 2019. John MacDougall/Pool via REUTERS/File Photo
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Ghana is expecting to secure a $1.15 billion funding from the International Monetary Fund (IMF) and the World Bank by the end of February as bilateral creditors near agreement on the terms of a debt restructuring.

The finance minister, Ken Ofori-Atta, expresses confidence in reaching an agreement with official creditors on the terms of a debt restructuring, with a meeting scheduled for January 8, Bloomberg reported.

Once an agreement is reached, the IMF executive board can assess Ghana’s performance under the program initiated in May, paving the way for the approval of a $600 million disbursement, the second part of its $3 billion bailout.

Despite some delays, Finance Minister Ofori-Atta expects the board to convene on January 18. The approval by the board will also set in motion the release of two World Bank disbursements amounting to $550 million.

The Bank has committed $300 million in budgetary support and another $250 million toward Ghana’s Financial Stability Fund, so “we are in good shape,” he said.

The disbursement for budgetary support is anticipated to occur by the end of this month, while the contribution to the fund, which aids financial institutions affected by the domestic debt restructuring, is expected to arrive by the end of February, according to Finance Minister Ofori-Atta.

In June, Ghana struck a deal with banks to restructure $1.36 billion in locally issued U.S. dollar bonds and cocoa bills to meet an International Monetary Fund (IMF) deadline and prioritize discussions with foreign creditors.

In September 2023, the Ghanian government filed for bankruptcy after failing to pay billions of dollars it owed international creditors in 2022. Ghana is among the three African countries that have failed to meet debt repayment obligations. The country has halted payments on the majority of its $28.4 billion external debt.

Source: Business Insider Africa