Ghana has formally secured $2.8 billion in debt relief after all 25 members of its official Creditor Committee fully signed the Memorandum of Understanding (MOU), which was initially reached in principle, under the G20 Common Framework for Debt Treatment.
Finance Minister, Dr. Cassiel Ato Forson, told the media in Accra on Wednesday, January 29, 2025.
This is expected to provide crucial fiscal breathing space as Ghana advances structural reforms under its $3 billion International Monetary Fund (IMF) programme.
“The Government of the Republic of Ghana is pleased to announce that the Memorandum of Understanding (MoU) reached with its Official Creditor Committee (OCC) has been signed by all Participating Creditor Countries.
“The signing of the MoU formalises the debt treatment agreed upon with Official Creditors and marks a crucial step towards Ghana restoring long-term debt sustainability.
The agreement provides significant debt service relief during the Fund-supported programme period, allowing financial resources to be directed towards supporting and strengthening the economic recovery”, he added.
He disclosed that discussions surrounding the remaining 7% of the deal are ongoing. The outstanding 7% involves negotiations with about 60 international financial institutions.
However, a $2.7 billion debt arrangement with commercial creditors remains unresolved – leaving the government focused on securing a final agreement in the coming months.
“Ghana continues to engage in good faith with all commercial external creditors, striving to finalise restructuring agreements that respect Ghana’s need for debt relief and the comparability of treatment principle,” the Minister added.
With the signing of the MOU by all members of Ghana’s official creditor committee, the country is nearing the completion of its external debt restructuring process.
Back in December 2022, Ghana found itself in the depths of a financial crisis, prompting the government to suspend portions of its external debt servicing to commercial and bilateral lenders. At the time, inflation had surged to a staggering 54%, and the country’s international reserves had dwindled to cover less than two months of imports.
Faced with mounting economic pressure, Ghana embarked on an ambitious debt restructuring journey, including the Domestic Debt Exchange Programme (DDEP), which was successfully completed in 2023.
The latest MoU formalises an agreement reached on January 12, 2024, under the G20 Common Framework for Debt Treatments, an initiative designed to provide comprehensive debt relief beyond the Debt Service Suspension Initiative (DSSI).
