Ghana’s debt restructuring takes another step forward

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Ghana’s long-running debt restructuring inched another step closer to the finish line on Friday after the country’s bilateral creditors – the likes of France and China – sent over a draft ‘memorandum of understanding’ for their $5.4 billion part of the deal.

Below is a condensed timeline of key events:

February 2022 – Credit ratings agency Moody’s downgrades Ghana’s credit rating from B3 to Caa1, saying the country had a “very high credit risk”, after Fitch cut its Ghana credit rating to B- from B in January.

March 2022 – Ghana’s central bank hikes interest rates by a record 250 basis points to 17% in a bid to stem rocketing inflation and a weakening currency.

April 2022 – The cocoa producer’s parliament approves an “e-levy” tax on electronic payments.

May 2022 – Ghana’s then-finance minister Ken Ofori-Atta says it will manage its debt without International Monetary Fund (IMF) help.

July 1, 2022 – Ghana’s government changes its mind and asks the IMF for a loan, amid street protests against growing economic hardship.

July 20, 2022 – Ghana’s parliament approves a $750 million loan from the African Export Import Bank as it scrambles to avoid default.

August 2022 – Ghana’s central bank delivers another record interest rate hike, as inflation continues climbing.

Dec. 5, 2022 – Ghana launches a domestic debt exchange in a bid to deal with spiralling debt payments.

Dec. 12, 2022 – Ghana and the IMF reach a “staff-level agreement” on a $3 billion rescue package, with debt restructuring one of the conditions.

Dec. 20, 2022 – Ghana says it will default on most external debt.

Dec. 22, 2022 – Local pension funds are exempted from the domestic debt exchange after unions threaten a general strike.

January 2023 – Ghana requests a debt restructuring under the G20’s Common Framework process, set up in response to the COVID-19 pandemic to include China, India and other creditor countries not in the traditional Paris Club of wealthy lending nations.

The post Ghana’s debt restructuring takes another step forward appeared first on Citinewsroom – Comprehensive News in Ghana.

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