Ghana has successfully concluded negotiations with the Paris Club on debt treatment, clearing the path for the International Monetary Fund (IMF) to disburse the upcoming tranche of $600 million to Ghana.

An insider familiar with the talks revealed to Graphic Business that the approval and disbursement of this tranche would also activate an additional $500 million in support from the World Bank, aimed at providing economic relief for Ghana.

The Ministry of Finance is expected to issue an official statement confirming these developments. This agreement with Ghana's official creditors sets the stage for the IMF Executive Board to greenlight the release of $600 million as part of its $3 billion bailout program.

Additional details reported by Reuters reveal that discussions surrounding the "cut-off date," indicating the point beyond which new loans with bilateral creditors won't undergo restructuring, recently became a point of contention in the negotiations.

Bilateral lenders, including China and France, which co-chair the Official Creditor Committee (OCC), hold approximately 25% of Ghana's $20 billion external debt slated for restructuring.

There were divergent views among creditors, with some favouring December 31, 2022, as the cut-off date, considering Ghana's default earlier that month.

Others advocated for March 24, 2020, the initiation of the Group of 20's debt service suspension initiative (DSSI), designed to aid the world's poorest nations amid the challenges posed by the COVID crisis. Ghana didn't participate in the DSSI.

No immediate responses were received from China's central bank, finance ministry, and the Export-Import Bank of China to Reuters' requests for comment.

Formal acceptance of the proposal by Ghana is still pending.

As per one source, the OCC plan envisions no reduction in principal or interest rates overall. However, Ghana is expected to abstain from payments for the next four years, with regular payments resuming thereafter.

After their meeting on Monday, official creditors reportedly shared the term sheet of their proposal with Ghana, as per media reports and insider sources.

Speaking about a possible deal with official creditors, Finance Minister Ken Ofori-Atta told Bloomberg he hoped to finish reviewing the draft term sheet by Friday and that "in terms of the broad framework, all parties are in agreement," which he said would allow the IMF to sign off on the disbursement.