Ghana and its international bondholders are set to resume negotiations next week on a crucial debt restructuring deal, according to four sources familiar with the situation. These talks follow the successful finalization of a separate agreement with official creditors earlier this week.
The West African nation, a major producer of gold and cocoa, defaulted on a large portion of its $30 billion external debt in 2022. The COVID-19 pandemic, the war in Ukraine, and rising global interest rates all contributed to the economic strain. Negotiations with two separate bondholder groups – Western asset managers and hedge funds, as well as regional African banks – began in March.
However, an impasse was reached in April as the proposed restructuring plan fell short of the requirements outlined by the International Monetary Fund’s (IMF) debt sustainability analysis. Both Ghana and the bondholders face pressure to reach a deal before the country’s December elections.
Sources close to the discussions revealed that government representatives contacted their counterparts among the bondholder groups shortly after finalizing the agreement with official creditors on Tuesday. This outreach included sharing details of the official creditor deal along with insights from the IMF’s updated debt sustainability assessment.
“There’s a strong incentive to move forward,” said one source, expressing optimism for a swift resolution. “Progress could be rapid.”
Ghana’s Finance Ministry has yet to respond to requests for comment.
The information exchange will serve as the foundation for next week’s discussions, with financial advisors currently poring over the details. The previous attempt to reach an agreement with the two bondholder groups, representing roughly $13 billion in Ghanaian external bonds, failed to meet the IMF’s debt-sustainability targets established during the first review of the Fund’s $3 billion loan program with Ghana.
However, sources suggest that Ghana’s economic situation has improved since the initial talks. Two sources expressed confidence that a new agreement will comply with the IMF’s adjusted debt-sustainability analysis, finalized after the second program review in early April.
