Ghana's finance minister hopes for debt-restructuring resolution by year-end

16 November 2023 - 09:30 By Christian Akorlie and Maxwell Akalaare Adombila
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Ghana’s finance minister Ken Ofori-Atta presented the country's budget speech on Wednesday and said Ghana's economy was improving.
Ghana’s finance minister Ken Ofori-Atta presented the country's budget speech on Wednesday and said Ghana's economy was improving.
Image: BLOOMBERG VIA GETTY IMAGES/SIMON DAWSON

Ghana is making progress in talks to restructure its external debt and hopes to achieve a resolution by the end of the year, its finance minister said on Wednesday.

In a budget speech, Ken Ofori-Atta said the economy was getting back on track with a smaller deficit than targeted in the first eight months of 2023.

The West African gold, oil and cocoa producer turned to the International Monetary Fund (IMF) for financial support last year to try to escape its worst economic crisis in a generation.

Ofori-Atta said the aim was for an agreement in principle on restructuring parameters with Ghana's official bilateral creditors in the coming week, to be later formalised in a memorandum of understanding.

On negotiations to restructure Eurobonds, Ghana had received "illustrative proposals" on debt-treatment scenarios from the two bondholder groups, he said.

"We are currently reviewing the illustrative proposals and expect to converge towards a solution in compliance with the comparability of treatment principle," Ofori-Atta said.

Ghana recorded an overall budget deficit of 3.0% of gross domestic product (GDP) in January-August, better than a targeted deficit of 4.6% of GDP, he said.

Real GDP growth averaged 3.2% in the first half of this year, an improvement on 2.9% growth in same period in 2022, he said.

Ghana targets GDP growth of at least 2.8% next year, an inflation rate of 15% by the end of December 2024 from more than 35% in October this year and a primary budget surplus of 0.5% of GDP next year, budget highlights showed.

The IMF approved a three-year, $3bn (R54bn) programme for Ghana in May, with an immediate disbursement of $600m (R10bn).

The rest is contingent on Ghana following through with commitments to restructure its domestic and external debts, cut spending and make other fiscal adjustments.

Reuters


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