IMF Board likely to meet on January 18 after OCC completes debt restructuring terms for Ghana

The Board of the International Monetary Fund (IMF) is likely to meet on January 18, 2024, to consider Ghana’s programme and possibly disbursement of the second tranche of $600 million to the country.

This was after Ghana’s bilateral creditors through the Official Creditor Committee completed work on the terms for restructuring Ghana’s debts, in what can be described as the “Term Sheet” for Ghana.   

Joy Business understands that the IMF had initially proposed January 11, 2024, and January 18, 2024, depending on how negotiations at the Official Creditor Committee level goes.

Sources say the delay in the IMF Board meeting was due to the challenge in getting China to agree on some of the terms for restructuring Ghana’s debt.

Proposed terms likely to be presented by bilateral creditors

Joy Business is learning that Ghana is likely not to pay interest and principal for the next four years. Repayment of the loans will therefore commence in the fifth years. 

Interest on these debts will likely be pegged between 2-3%

Will this new date materialise?

Joy Business understands that unlike previous dates, the board meeting will come on based on fresh commitments that the Fund has secured from the bilateral creditors on Ghana.

The IMF had in previous occasions told Joy Business that it will meet on Ghana’s programme once it secures the necessary financing assurance from bilateral creditors.

Sources say all the creditors have also agreed on December 2022 as the cut-off date for restructuring of Ghana’s debts.

The Official Creditor Committee is expected to send the “Letter of Comfort” or what has been described as Memorandum of Understanding to the IMF today January 12, 2024 or January 15, 2024. This will then help the board to go ahead and meet on Ghana’s programme.

Finance Minister, Ken Ofori Atta, had told Bloomberg that Ghana has received a draft term sheet on debt relief from its official creditors that is sufficient for the International Monetary Fund to disburse $600 million.

“We are reviewing the draft term sheet,” Mr. Ofori-Atta said in an interview in the capital, Accra, declining to provide details in the draft accord.

What next?

 If the IMF is able to receive the MoU from the Official Creditor Committee on January 12, 2024, its board will go ahead and meet on Ghana and review the country’s performance under the IMF programme and approve the disbursement of some $600 million to Ghana. The funds will likely be credited to the Bank of Ghana’s accounts maximum five days.

Meanwhile, Joy Business cannot independently confirm whether Ghana has accepted all the proposed debt restructuring terms.

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