Ghana, two bondholder groups reach interim deal on $13bn debt

Tuesday June 25 2024

Ghana's President Nana Akufo-Addo looks on during the 5th Summit of "Christchurch Call", at the Elysee Presidential Palace in Paris, France on November 10, 2023. PHOTO | REUTERS


Ghana's long-running debt restructuring took another step towards the finish line on Monday after the government said it struck an agreement in principle on a debt rework with holders of some $13 billion of international bonds.

Below is a condensed timeline of key events:

  • February 2022 - Credit ratings agency Moody's downgrades Ghana's credit rating from B3 to Caa1, saying the country had a "very high credit risk", after Fitch cut its Ghana credit rating to B- from B in January.
  • March 2022 - Ghana's central bank hikes interest rates by a record 250 basis points to 17 percent in a bid to stem rocketing inflation and a weakening currency.
  •  April 2022 - The cocoa producer's parliament approves an "e-levy" tax on electronic payments.
  • May 2022 - Ghana's then-finance minister Ken Ofori-Atta says it will manage its debt without International Monetary Fund (IMF) help.

Read: Ghana president reshuffles cabinet

  • July 1, 2022 - Ghana's government changes its mind and asks the IMF for a loan, amid street protests against growing economic hardship.
  • July 20, 2022 - Ghana's parliament approves a $750 million loan from the African Export Import Bank as it scrambles to avoid default.
  • August 2022 - Ghana's central bank delivers another record interest rate hike, as inflation continues climbing.
  • December 5, 2022 - Ghana launches a domestic debt exchange in a bid to deal with spiralling debt payments.
  • December 12, 2022 - Ghana and the IMF reach a "staff-level agreement" on a $3 billion rescue package, with debt restructuring one of the conditions.
  • December 20, 2022 - Ghana says it will default on most external debt.
  • December 22, 2022 - Local pension funds are exempted from the domestic debt exchange after unions threaten a general strike.
  • January 2023 - Ghana requests a debt restructuring under the G20's Common Framework process, set up in response to the Covid-19 pandemic to include China, India and other creditor countries not in the traditional Paris Club of wealthy lending nations.
  • February 2023 - Ghana's finance ministry says the domestic debt exchange closed with about 85 percent of "eligible" bondholders on board, after five deadline extensions. The country's official bilateral creditors start talks to form a committee.
  • March 2023 - Ghana's government and a group of holders of about $13 billion in international bonds start debt restructuring talks via their respective advisers.
  • May 2023 - Ghana's official creditors form a committee co-chaired by China and France and commit to restructuring their loans to the country. These "financing assurances" pave the way for the IMF board to approve the $3 billion rescue loan, five days later.
  • June 2023 - Ghana sends a restructuring proposal to official creditors, as it aims to cut $10.5 billion in interest payments over the following three years.
  • October 2023 - Ghana and the IMF reach a staff-level agreement on the first review of the $3 billion loan programme, with a second $600 million payout contingent on agreeing a debt rework plan with official creditors. The finance ministry proposes a 30-40 percent haircut to bondholders; bond prices sink in response.
  • January 2024 - Ghana reaches a deal-in-principle on January 12 to restructure $5.4 billion of debt to its official creditors, with the IMF subsequently approving the next loan payout a week later.

The government tells overseas bondholders that it wants a simple debt restructuring, rather than using any "state-contingent debt instruments", which link payouts to variables such as economic growth or commodity prices.


Read: Ghana's debt restructuring takes another step forward

  • February 2024 - Ghana's president replaces Ken Ofori-Atta as finance minister with his deputy Mohammed Amin Adam, who pledges to keep the IMF programme on track.
  • March 2024 - Ghana and the international bondholder group kick off formal talks.
  • April 2024 - Ghana and its bondholders fail to strike a deal, with the government saying the proposals put forward were not extensive enough to cut its debt to a level that the IMF would judge as sustainable.
  • May 2024 - Ghana's government confirms that a draft memorandum of understanding has been received from its bilateral creditors. Once signed, the MoU will formalise the $5.4 billion agreement reached in January with the likes of France and China.
  • June 2024 - Ghana and its international bondholders reach an agreement in principle on restructuring of its dollar bonds.