The $600 million second tranche of the $3bn IMF credit facility to Ghana is very likely to be approved by the Board of the Fund on Friday, January 19, 2024.
The anticipated approval of the second tranche by the IMF Board follows Ghana being able to secure a debt treatment agreement with the Official Creditor Committee (OCC) which has led to the restructuring of some $2.5 billion out of a total exposure of $5.1 billion owned bilateral creditors.
The Official Creditor Committee (OCC), co-chaired by China and France, presented a draft term sheet to the government of Ghana and the International Monetary Fund on January 12, 2024.
This will lead to a memorandum of understanding and then clearance to the management of IMF to go to the board to seek approval to release the second tranche of $600 million to Ghana.
Expressing optimism that the Board will approve the $600m disbursement given the country’s level of discipline, Finance Chief Ken Ofori-Atta noted, “The draft term sheet from the OCC means in effect that the co-chairs, France and China, working with members of the Official Creditor Committee, had come to a broad agreement on the way forward. That really signals to the Fund that they can proceed to have the board meeting, which will lead to the release of the $600 million, which we negotiated with the Fund.”
Ghana’s cutoff date for the restructuring of the $2.5 billion has been extended from March 2022 to December 2022.
The country’s attempt to get a deal from Paris Club members and bilateral creditors has dragged on for months. The delay, according to analysts, was largely due to the low level of cooperation from China and France, who presented new conditions.
Meanwhile, the IMF has welcomed Ghana’s debt treatment agreement with its external creditors.
Managing Director of the IMF, Kristalina Georgieva took to her X handle to express her delight.
”Great news on Ghana reaching an agreement with its official bilateral creditors on a debt treatment. This clears the path for our Board to consider Ghana’s first program review and continue providing much-needed support,” she tweeted.