Govt Reaches Deal With Official Creditor Committee To Secure Debt Relief | Economy

In an important development for Ghana’s fiscal outlook, the government has successfully concluded discussions with its Official Creditor Committee (OCC) regarding the debt treatment plan outlined in January 2024.

The Memorandum of Understanding (MoU) formalizing the agreement, which was principally brokered with Official Creditors earlier this year, is a significant milestone in Ghana’s endeavor to achieve long-term debt sustainability.

The OCC, co-chaired by economic powerhouses China and France, played instrumental roles in facilitating the negotiations that culminated in the finalization of the MoU. The agreement retains the financial terms previously established and offers substantial debt service relief over the duration of the Fund-supported program. This strategic move aims to free up essential financial resources that can be channeled into critical sectors like infrastructure, healthcare, and education to foster sustainable socio-economic growth.

The successful establishment of the formal OCC pact is anticipated to pave the way for the approval of the second review of the Fund-supported Post Covid-19 Programme for Economic Growth (PC-PEG) by the IMF Executive Board.

This endorsement will unlock the disbursement of the next tranche of IMF financing amounting to US$360 million and may attract further financial assistance from key development partners, notably the World Bank.

Furthermore, the completion of the official creditor agreement is poised to fortify ongoing engagements with private creditors as Ghana strives to expedite parallel restructuring agreements to align with the principle of comparability of treatment. Each official creditor within the OCC will proceed with their respective internal protocols to formalize the MoU, paving the way for individual bilateral agreements with Ghana to implement the mutually agreed terms.

In light of these developments, Minister for Finance, Dr. Mohammed Amin Adam, reiterated Ghana’s commitment to meeting its debt obligations responsibly while emphasizing the imperative of equitable treatment across all creditors.

Dr. Adam urged official creditors to expedite their internal processes for signing the bilateral agreements, underscoring Ghana’s dedication to constructive engagement with commercial external creditors to reach mutually beneficial resolutions promptly.

Dr. Adam expressed gratitude on behalf of the Republic of Ghana to all members of the OCC, especially the co-chairs, China and France, for their steadfast support in navigating the nation’s debt challenges.

He hailed the landmark OCC agreement as a pivotal achievement in Ghana’s debt restructuring narrative and a key enabler for driving forward the country’s robust reform agenda with the backing of supportive development partners.

“We call upon our official creditors to fast-track their internal processes towards the signing of the bilateral agreements. Ghana continues to engage in good faith with all commercial external creditors, striving to finalize restructuring agreements that respect Ghana’s need for debt relief and the comparability of treatment principle.”

“Ghana also reiterates its firm commitment to remain in arrears with its external commercial creditors until agreements compatible with the comparability of treatment principle are reached”, Minister for Finance, Dr. Mohammed Amin Adam mentioned in a statement issued by the Ministry.

“The Ministry of Finance on behalf of the Republic of Ghana extends our gratitude to all members of the OCC, particularly the committee’s co-chairs, China and France, for their unwavering commitment to assisting our country in resolving its debt issues.

“This landmark agreement marks an extraordinary milestone in Ghana’s debt restructuring journey and will further strengthen our ambitious reform agenda with the strong support of our development
partners”, the statement indicated.