Ghana's Finance Minister, Ken Ofori-Atta, announced on Monday a significant debt reduction plan under a $3 billion International Monetary Fund (IMF) bailout. The country aims to reduce its debt to 55% of GDP by 2028, a significant decrease from the current level of 109%.
Ofori-Atta revealed the plans during a livestreamed investor presentation, where he discussed ongoing negotiations with bondholders, including those holding $13 billion of public Eurobonds. The restructuring terms under consideration include haircuts between 30% and 40%, coupons not exceeding 5%, and final maturities not surpassing 20 years.
Alongside these efforts, Ghana is in the process of reaching an agreement with bilateral lenders. This agreement will be discussed in an upcoming IMF board meeting and will serve as the foundation for negotiations with commercial and external creditors under the Group of 20 Common Framework for Debt Treatment.
Ghana's $77 billion economy is restructuring a large part of its $50 billion public debt under this framework. The expanded Paris Club of sovereign creditors, which includes China, is part of this initiative. The government plans to achieve its ambitious debt reduction target through domestic debt restructuring and fiscal adjustments. It expects the agreement with external creditors to provide the remaining relief needed to reach its target.
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