Ghana fails to reach deal with intl. debtors

Ghana failed to reach a deal with international bondholders to restructure $13 billion of debt, which hinders its efforts to emerge from default and economic crisis, as per a Reuters report on Monday. Talks stalled due to concerns from the IMF about debt sustainability.

A regional African bondholder group also rejected parts of the proposed rework, including a “PAR option” to retain the original bond value with extended maturity and reduced coupon.

Ghana defaulted on most of its $30 billion external debt in December 2022, facing increased debt costs and inflation. The government seeks solutions aligned with IMF parameters, aiming for a mutual agreement. Moreover, two groups of bondholders are involved, one international and the other regional African.

Finance Minister Mohammed Amin Adam expressed confidence in reaching a deal without specifying a timeline. The IMF emphasised the need for progress in bondholder talks during its second review of the $3 billion loan program with Ghana.

The proposed bondholder deal included discounted options with varying coupons and maturities. Some bondholders preferred state-contingent debt instruments to align economic outlooks.