Ghana resumes debt talks with bondholders after creditors deal

Ghana is set to resume negotiations with international bondholders next week to restructure a massive $13 billion debt, according to sources familiar with the situation.

This follows a successful deal finalized earlier this week with official creditors.

The West African nation, a major producer of gold and cocoa, defaulted on most 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.

Formal talks with two separate bondholder groups – Western asset managers and regional African banks – commenced in March.

However, negotiations stalled in April due to the proposed deal exceeding the International Monetary Fund’s (IMF) debt sustainability requirements.

Both parties are eager to finalize an agreement before Ghana’s December elections.

Sources revealed that government advisors contacted their counterparts at the bondholder groups shortly after the official creditor deal was signed on Tuesday.

Details from the new IMF debt sustainability assessment were also shared, suggesting a more positive outlook.

“There’s an incentive for both sides,” said one source, hinting at the possibility of a swift resolution. The Finance Ministry declined to comment.

The information exchange will serve as the foundation for next week’s discussions.

Financial advisors are currently reviewing the details to ensure a compliant restructuring plan within the IMF’s revised debt sustainability framework as outlined in the second review of Ghana’s $3 billion loan program.

While the previous talks with bondholders failed to meet the initial IMF targets, sources believe the improved economic situation and adjusted DSA will lead to a successful agreement.

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