The government and the lender announced that Ghana has secured a deal with foreign creditors for a debt restructure, which was essential to securing its $3 billion credit line from the IMF.
Ghana accepted a loan from the International Monetary Fund (IMF) in order to strengthen its public finances and more effectively manage its substantial debt load, as the country faced its worst economic crisis in decades.
Campaigning for the December presidential election, in which President Nana Akufo-Addo’s New Patriotic Party will run for a historic third term in government, will heavily focus on Ghana’s economic prospects.
Ghana received its first $600 million tranche of the IMF loan in May last year.
The external debt deal helps clear the way for approval of another $600 million payment.
“This development constitutes a significant positive step towards restoring Ghana’s long-term debt sustainability,” a Finance Ministry statement said late Friday.
Last year Ghana successfully carried out a restructuring of its domestic debt.
Ghana effectively defaulted on its large balance of payments deficit since it was unable to make payments on the majority of its external debt.
The conditions for restructuring include debt that is bilateral as well as commercial, including Eurobonds.
Ghana has reached “an agreement in principle with their official creditors on a debt treatment, consistent with the objectives of the IMF-supported program, which aims to restore macroeconomic stability and debt sustainability,” according to IMF managing director Kristalina Georgieva.
According to her, the agreement “clears the path for IMF Executive Board consideration” of Ghana’s three-year accord’s initial review “in the coming days.”
The World Bank Board will examine $300 million in development funding for Ghana if the government of Ghana receives clearance from the IMF Board.