Eurobond holders may not lend to African countries such as Ghana and Ethiopia in the future due to default in repaying their debt, a Senior Fellow at the African Council, who is a former Director of the African Development Bank, Gabriel Negatu, ha revealed.
He therefore wants the International Monetary Fund to ensure debt-ravaged countries get favorable terms from bilateral creditors over debt restructuring.
He was speaking to Kenya-based CGTN Africa on the optimism by the IMF that Ghana will reach an agreement with official creditors soon over the restructuring of external debt.
“The countries are in difficult situations. They need to borrow but the Eurobond particularly in the future is very unlikely to lend to African countries……..should they be able to turn around and say we will treat you equitably with everyone else and the other side, no”.
“The bilateral lenders operate under different modules so this is a negotiation that has to take place because on one hand you have the G20 and on the other hand you have the commercial lenders. African countries are caught between these two and I would imagine these should lead the Fund to get between these two and say, how do we manage this, who gets paid because this equitable treatment requires every lender to be treated the same way?”
On whether Ghana will soon receive the second tranche of $600 million from the IMF, Mr. Negatu, said once Ghana gets an agreement with the bilateral creditors, “The IMF would release the second tranche of $600 million which will be critically helpful in terms of reducing the debt to a sustainable level and creating some sort of macro-stability”.
A Memorandum of Understanding (MoU) between Ghana and the bilateral creditors is expected to be signed once an agreement is reached on the external debt restructuring.
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