Ghana’s official creditors are due to meet on Monday to discuss restructuring approximately $5.4 billion in loans to the country, according to three sources, a vital step required to secure the country’s next tranche of money from the International Monetary Fund.
The bilateral lenders, including the governments of China and France who co-chair the Official Creditor Committee (OCC), hold around a quarter of Ghana’s $20 billion external debt earmarked for restructuring.
According to individuals familiar with the situation, the meeting will once again focus on reaching an agreement on a “cut-off date” – the period after which fresh loans from bilateral creditors would not be restructured. Defining this date has proven to be a stumbling issue for Ghana in its debt restructuring.
According to sources, some creditors favor Dec. 31, 2023, as a cut-off date, with Ghana having defaulted earlier that month.
Others, however, advocated for March 24, 2020, because that is when the Group of 20 launched its debt service suspension initiative (DSSI) to assist the world’s poorest countries in dealing with the aftermath of the COVID crisis. Ghana did not take part in the DSSI.
The Paris Club of big creditor nations, which does not include China among its permanent members, will meet on Friday in preparation for the OCC meeting on January 8, according to two sources.
According to one source with direct information, the Paris Club exchanged a technical note on Ghana with other bilateral creditors and multilateral lenders this week, and the group of rich nations is considering December 2023 as the cut-off date.
“Ghana is still about cut-off date, but creditors haven’t agreed yet,” a person familiar with the matter said. “If the cut-off date is agreed, that means an agreement on debt restructuring is close.”
A Paris Club spokeswoman declined to comment on talks that had yet to take place.