Sources disclosed that the government of Ghana and the international bondholders are pushing forward with formal debt talks after advisors to both sides signed non-disclosure agreements.
According to one of the sources, “The government and the bondholders are sharing sensitive material through the advisers, like the revenues that could be used to service the debt and the restructuring parameters the creditors are aiming for,” the source noted.
Ghana, the biggest producer of cocoa, which suspended payments on most of its external debt last year, has picked Lazard as its financial adviser, while a group of international private lenders are represented by Rothschild & Co. Ghana’s dollar-denominated debt is more than US$13 billion across maturities ranging from 2023 to 2061, according to Refinitiv data.
After signing the NDAs earlier this month, both parties cannot share any information under the agreement with any non-authorised party. Steering members of the committee include Abrdn, Amundi, BlackRock, Greylock Capital Management and Ninety-One.
Ghana, which is struggling with its worst economic crisis in a generation, has already struck a deal to write down its domestic debt and has also requested to rework its bilateral debt under the common framework platform supported by the Group of 20 major economies.
An official creditor committee for talks with sovereign creditors such as China and the Paris Club is still pending.
Finance Minister’s Visit to China
Finance minister Ken Ofori-Atta travelled to China last week to discuss ways to reduce the country’s debt burden and secure additional financing assurances for the economic programme. Ghana recently said it owed to Chinese creditors US$1.9 billion.
At a meeting in Beijing with Ghana’s Finance Minister, Ken Ofori-Atta, last week, Mr. Kun said the Chinese authorities “have confidence in Ghana’s economic management and its long term economic viability.”
Mr. Kun said he wanted to ensure that Ghana’s external debt treatment request was considered expeditiously and was thus accompanied to the meeting with Mr. Ofori-Atta by a high-level delegation including Mr. Wu Fuli, Chairman of China Exim-Bank.
Minister Kun said “we know that these are short-term challenges which we as responsible creditors, remain committed to resolving”. “The long-standing and prosperous relationship between Ghana and China imposes on us a responsibility to help,” the Chinese Finance Minister added.
Minister Kun said that just like other African countries, Ghana was facing economic difficulties from a once-in-a-lifetime pandemic, geopolitical tensions and interest rates hike in advanced countries with a spillover effect on developing countries.
Ghana has since secured a staff-level agreement with the International Monetary Fund (IMF) in December for a US$3 billion loan, though asking bilateral lenders to provide financing assurances is a condition for the IMF’s executive board to sign off the programme.
