Accra, Ghana – June 24, 2024 – Ghana’s long and arduous journey towards restructuring its crippling debt has taken a significant step forward. The government announced today that it has reached an agreement in principle with holders of some $13 billion in international bonds.
This breakthrough follows a tumultuous two-year period marked by spiraling inflation, currency devaluation, and a desperate scramble to avoid default. In July 2022, facing mounting economic hardship, Ghana reversed course and sought assistance from the International Monetary Fund (IMF) after previously rejecting such help.
The IMF’s $3 billion rescue package, however, hinged on significant debt restructuring. Negotiations began in December 2022, with Ghana first tackling its domestic debt through an exchange program. Talks with official bilateral creditors, including China and France, followed in May 2023, culminating in a $5.4 billion debt restructuring deal in January 2024.
The agreement with international bondholders represents the final piece of this complex puzzle. Details are still emerging, but the government has indicated its preference for a straightforward restructuring without complex instruments tied to economic performance.
This progress is a crucial victory for Ghana’s President. In February 2024, he replaced his finance minister with a new leader committed to upholding the IMF program. Negotiations with bondholders stalled in April when their proposals fell short of achieving the debt sustainability levels demanded by the IMF.
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