Ghana has resolved 93% of its external debt through sweeping restructuring agreements, leaving just 7%—valued at $2.7 billion—to be negotiated with a fragmented group of commercial creditors.
Finance Minister Dr. Cassiel Ato Baah Forson confirmed the milestone during a press briefing, hailing progress under the International Monetary Fund (IMF) program while acknowledging the complexity of finalizing deals with 60 international banks holding the remaining debt.
“The road ahead is narrow but steep,” Dr. Forson said, emphasizing that the unresolved portion involves individualized talks with creditors outside formal groups like the G20 Common Framework. Unlike bondholders or bilateral lenders, these commercial banks operate independently, requiring bespoke negotiations to align with Ghana’s debt sustainability targets. A timeline for concluding these talks will be unveiled in the coming days, he added, with the government pledging to uphold “comparability of treatment” principles to ensure fairness.
The announcement follows Ghana’s recent signing of a critical Memorandum of Understanding (MoU) with its 25-nation Official Creditor Committee (OCC), restructuring 5.1billioninbilateralloansandsecuring2.8 billion in debt service relief through 2026. Earlier breakthroughs included a 2023 domestic debt exchange covering GH¢203.4 billion and a June 2024 deal with Eurobond holders to slash 13.1billioninbonds,resultingin4.7 billion in debt cancellation and $4.4 billion in near-term savings.
Ghana’s restructuring spree, initiated in December 2022 under the G20 framework, has been pivotal to its IMF-backed recovery plan. Targets include reducing the debt-to-GDP ratio to 55% by 2028 and capping debt service at 18% of revenue. By December 2024, public debt had eased to 74.6% of GDP, down from a perilous 90% peak, offering modest fiscal breathing room.
Yet analysts warn that the final 7%—though small in proportion—could test Ghana’s diplomatic and administrative stamina. “Each bank has its own risk appetite and legal constraints,” said Franklin Cudjoe, director of Accra-based think tank IMANI Center. “This isn’t just about numbers; it’s about persuading 60 institutions to take haircuts without spooking future investors.”
Dr. Forson downplayed risks of derailment, stressing that resolved deals have already unlocked IMF program compliance and stabilized macroeconomic indicators. Inflation, though still high at 18%, has retreated from 2023’s 54% crisis levels, while the cedi’s volatility has eased.
With the bulk of restructuring complete, the government aims to pivot toward reigniting growth through infrastructure investments and private sector incentives. However, pre-election pressures loom. President Mahama’s administration faces demands to scrap controversial taxes like the e-levy, which would erase GH¢6.37 billion in 2025 revenue—a move that risks clashing with IMF deficit reduction mandates.
The Finance Minister reiterated commitments to structural reforms, particularly in Ghana’s crisis-hit cocoa and energy sectors. Legacy debts in energy total $1.6 billion, while cocoa production has slumped to a 15-year low, stifling export earnings. “Debt relief alone won’t fix systemic issues,” Dr. Forson acknowledged. “We need sectoral overhauls to attract investment and diversify the economy.”
Ghana’s progress has drawn cautious optimism from international observers, who view its restructuring as a bellwether for other debt-distressed African nations. Yet the unresolved $2.7 billion underscores a broader challenge: commercial creditors’ reluctance to absorb losses without guarantees.
“Ghana’s success hinges on balancing creditor goodwill with growth-focused policies,” said Razia Khan, Standard Chartered’s Chief Africa Economist. “The final stretch will demand transparency and agility.”
As talks with banks intensify, the government insists no new taxes will be introduced to offset revenue shortfalls, betting instead on improved collection and natural resource governance reforms. For now, the focus remains on crossing the debt restructuring finish line—and proving that fiscal discipline can coexist with economic revival.
