Ghana is currently in negotiations with its official creditors to establish cut-off dates for the exclusion of new loans from the restructuring of the country's foreign debt, according to two sources with knowledge of the matter who preferred to remain anonymous due to the confidential nature of the discussions.

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Recent meetings of the official creditor committee, co-chaired by France and China, have considered December 2022 and March 2020 as potential cut-off dates. These dates are significant as Ghana is undergoing debt restructuring within the framework of the G20 Common Framework platform after defaulting in early 2022 following a series of credit rating downgrades.

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The country faced rising borrowing costs and debt servicing expenses, exacerbating an economic crisis characterized by currency devaluation and soaring inflation. While December 31, 2022, aligns closely with Ghana's default date, March 24, 2020, is also under consideration as a cut-off date.

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This is because it corresponds with the introduction of the G20 Debt Service Suspension Initiative (DSSI), designed to assist the world's poorest countries in coping with the impact of the COVID-19 crisis. However, Ghana did not apply for the DSSI, which was utilized by 48 countries and had the support of the International Monetary Fund (IMF) and the World Bank.

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The sources revealed that there is no definitive decision yet, with Ghana and the IMF favoring December 2022 due to the Debt Sustainability Analysis (DSA) being based on that date. If a March 2020 cut-off date is chosen, it could result in the exclusion of loans such as Afreximbank's $750 million commercial loan due in July 2022. The sources did not provide specific estimates for the different debt relief scenarios related to the cut-off dates.

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In discussions with bilateral creditors, Ghana has presented a "priority list of projects" that it wishes to exclude from the restructuring. However, the source did not disclose the details or the value of these projects. Removing these projects would align with the March 2020 cut-off date since most of them were signed after that time.

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Ghana is in the process of restructuring both its domestic and external debt following a $3 billion bailout from the IMF secured in May. The country is aiming for $10.5 billion in external debt service relief from 2023 to 2026 as it negotiates the restructuring of $20 billion of its foreign debt with bilateral creditors, including China, Paris Club members, and overseas bondholders.

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Ghana is in the process of restructuring both its domestic and external debt following a $3 billion bailout from the IMF secured in May. The country is aiming for $10.5 billion in external debt service relief from 2023 to 2026 as it negotiates the restructuring of $20 billion of its foreign debt with bilateral creditors, including China, Paris Club members, and overseas bondholders.

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