The Government of Ghana will be utilizing the common framework platform of the Group of 20 major economies in order to facilitate a debt restructuring.According to one of the sources, who asked not to be identified because the talks are private, the West African country will ask bilateral creditors to form a committee as soon as possible, aiming for expedited treatment on over $5 billion in debt.
According to the source, the request is part of a virtual presentation hosted by Ghanas finance ministry under the auspices of the Paris Club, a group of creditor nations.
Ghanas debt restructuring under the common framework seeks to include non-Paris club members such as China in debt relief discussions. China, with $1.7 billion in debt, is Ghana’s largest bilateral creditor, according to the International Institute of Finance (IIF).
Requests for comment were not returned by the Paris Club. Ghana’s finance ministry did not immediately respond to a request for comment.
Reuters was the first to report on Thursday that Ghana was seeking debt relief under the G20 program.
The crisis-hit country, which secured a $3 billion staff-level agreement with the IMF in mid-December, has been hesitant to make this request due to the lengthy delays experienced by other countries using the process.
Ghana would be the fourth country to apply to the initiative, which was launched in 2020 to help streamline debt restructuring efforts following the Covid-19 pandemic.
Slow progress on the platform has been widely criticized. While Chad reached a creditor agreement in November, Zambia is still in talks, and Ethiopia’s progress has been hampered by civil war.
The formation of an official creditor committee is a critical step in formally requesting financial assurances from bilateral creditors that they are willing to engage in debt rework.
Without these guarantees, the IMF’s executive board would delay program approval and, consequently, money disbursements.
