(Bloomberg) — Ghana reached a deal with creditors formalizing debt treatment plans agreed in January, opening the the way for the disbursement of aid from the International Monetary Fund, the finance ministry said Wednesday.
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“The financial terms of the agreement remain unchanged,” the ministry said in a statement. “It provides significant debt service relief during the IMF-supported program period, allowing financial resources to be directed toward critical areas such as infrastructure, health care and education.”
The West African nation is restructuring almost all of its obligations worth more than $40 billion as part of conditions for a $3 billion IMF program. The deal with creditors will help unlock a $360 million tranche from the IMF and may help serve as buffer for the cedi, which has lost 20% of its value to the dollar this year.
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The government’s dollar bonds due in 2027 gained 0.71 cent to 51.66 cents on the dollar as of 5:03 p.m. in London. The cedi traded little changed at 15 per dollar.
The latest deal with the creditors committee, chaired by China and France, builds on an agreement in principle reached in January to revamp $5.1 billion of obligations.
“The agreement will provide significant flow relief to the Republic of Ghana by rescheduling all debt service – principal and interests – falling due between 2023 to 2026,” Minister of Finance Mohammed Amin Adam told reporters in Accra.
The MoU now needs to be signed by each creditor.
“Once signed, the agreed terms will be implemented through bilateral agreements with each OCC member,” the finance ministry said. “We call upon our official creditors to fast-track their internal processes toward the signing of the bilateral agreements.”
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(Updates with comment from finance minister in sixth paragraph.)
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