by Nurat Uthman
Ghana has reached an agreement in principle with two bondholder groups to rework some $13 billion of international debt with as much as a 37% haircut, it said on Monday, edging closer to completing a debt overhaul that has been years in the making.
Under the agreement, bondholders will forego about $4.7 billion of their claims and provide cash flow relief of about $4.4 billion during the period of Ghana’s current loan programme with the International Monetary Fund that is scheduled to end in 2026.
“The formal launch of the consent solicitation is expected in the upcoming weeks,” the government said, referring to the process of putting the proposal to all its bondholders which, if passed, would see the country emerge from default.
Details of the deal were first reported by Reuters on Thursday.
The agreement will offer Ghana a path to economic recovery through significant debt relief and provision of cash flow, the committee representing international bondholders said in a statement welcoming the deal.
“The debt restructuring, which has become one of Ghana’s biggest problems in the past two, three years, we are bringing (it) to an end,” Ghana’s finance minister, Amin Adam, said during a meeting with members of the Ghanaian diaspora on Sunday in the UK.
The finance ministry did not immediately respond to a request for comment on Monday.
Theo Acheampong, principal analyst at S&P Global Market Intelligence, said the announcement was good news for the country.
“It has actually been much faster than peers such as Zambia and should help bring down the public debt and unlock more resources to spend on priority growth areas such as agriculture and stalled infrastructure projects,” he said.
