Govt secures landmark debt agreement with Official Creditors Committee

The Government has announced a significant milestone in its debt restructuring journey, having reached an agreement on a Memorandum of Understanding (MoU) with its Official Creditor Committee (OCC).

This is concerning the debt treatment agreed upon in January 2024. The OCC, co-chaired by China and France, played pivotal roles in achieving this milestone.

The MoU formalises the agreement in principle reached with Official Creditors in January and marks a crucial step towards restoring Ghana’s long-term debt sustainability.

“The financial terms of the agreement remain unchanged, providing significant debt service relief during the Fund-supported program period,” stated the Finance Minister, Dr Mohammed Amin Adam.

This relief will allow financial resources to be redirected towards critical areas such as infrastructure, healthcare, and education.

The formalisation of the OCC agreement is expected to pave the way for the approval by the IMF Executive Board of the second review of the Fund-supported Post-COVID-19 Programme for Economic Growth (PC-PEG).

This approval will facilitate the disbursement of the next tranche of IMF financing, amounting to US$360 million.

Additionally, the IMF Board’s approval is anticipated to trigger more financial assistance from development partners, particularly the World Bank.

The agreement will also bolster ongoing discussions with private creditors, with whom Ghana is committed to finding a comparable agreement as early as possible.

“Each official creditor will now follow its internal procedures to sign the MoU. Once signed, the agreed terms will be implemented through bilateral agreements with each OCC member.

“We call upon our official creditors to fast-track their internal processes towards the signing of the bilateral agreements,” urged Dr Adam.

Ghana continues to engage in good faith with all commercial external creditors, striving to finalise restructuring agreements that respect Ghana’s need for debt relief and the comparability of treatment principle.

The country reiterates its firm commitment to remain in arrears with its external commercial creditors until agreements compatible with the comparability of treatment principle are reached.

Dr Adam expressed his gratitude to the OCC members, particularly the committee’s co-chairs, China and France, for their unwavering support.

“This landmark agreement marks an extraordinary milestone in Ghana’s debt restructuring journey and will further strengthen our ambitious reform agenda with the strong support of our development partners,” he noted.

This historic agreement is expected to provide a strong foundation for Ghana’s economic recovery and sustainable development, reinforcing the nation’s commitment to transforming its economy beyond aid.