The International Monetary Fund (IMF) executive board has announced that it will convene on Friday to approve the disbursement of a $600 million rescue loan to Ghana, after the latter’s achievement of its objective of restructuring $5.4 billion of official creditor debt.
According to a source, the board date is expected to be published in the IMF’s public calendar on Tuesday.
Last week, Ghana reached an agreement with its bilateral creditors, which included China and France, which was a crucial step toward obtaining the funding for the second round of the $3 billion IMF bailout.
IMF Managing Director, Kristalina Georgieva the development clears the path for the executive board’s first review of Ghana’s programme.
The West African country defaulted on most external debt in December 2022 after servicing costs soared. It also needs to reach a relief deal with private holders of about $13 billion in international bonds.
The bonds rose almost 1 cent on the dollar on Monday, with the 2042 maturity up the most, climbing 0.82 cents to 43.09 cents, its highest level since early November.
Chinese Foreign Ministry spokesperson, Mao Ning said “Recently, China encouraged all parties to overcome technical difficulties and narrow differences, and finally led all parties to reach a basic consensus on Ghana’s debt settlement plan… on January 8,”
“Some members of the Official Creditor Committee, which is co-chaired by China and France, are still going through their internal procedures,”
Ghana is aiming to restructure $20 billion of external debt, which totalled about $30 billion at the end of 2022, under the Common Framework, a debt restructuring process set up by the G20 countries during the COVID-19 pandemic.
It has targeted cutting $10.5 billion from payments due between 2023-2026.
The IMF second tranche payout, once signed off, should also trigger $550 million in additional World Bank funding, Ghana’s finance ministry said on Friday.
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