Policy Analyst and Economist, Dr. Theo Acheampong, cautions that Ghana may face difficulties in obtaining debt relief of around $10.5 billion from foreign creditors, including bilateral lenders.
According to him, experiences from Zambia and others suggest that the road ahead for the nation to secure $2.6 billion annually in debt relief for the next four years will be difficult.
The country has already submitted a proposal on debt restructuring to its official creditors.
But speaking to Africa News, Dr. Acheampong said the country may not get a favorable deal from the external creditors.
“What Ghana wants to do is over the course of the next three, four years under the IMF programme, get as much as 10 and half billion dollars of relief coming from the creditors. So more than half of the $20 billion debt is what it’s looking to get from them [external creditors] and that translates to about $2.6 billion every year that Ghana hopes to get in the form of relief or retrieve from these creditors.”
“It’s going to be a bit difficult because we’ve seen similar instances with the likes of Zambia. But there’s been a major contestation around how we treat certain creditor groups”, he explained.
He furthered that Ghana is too much exposed to Eurobonds and other commercial loans, adding, “So I think, the road ahead is going to be quite challenging in the sense that all the $2.6 billion they [creditors] need to get every year, it probably will not amount to that and this is just on the basis of some of the evidence we’ve seen with other countries that have attempted to go down this road”.
Continuing, Dr. Acheampong said “It does make it quite difficult largely because most of the commercial creditors have different obligations to their shareholders, but also because Ghana in a way defaulted on making the interest payment on a number of these debt obligations since December of last year”.
Again to him, it does make the process rather much more complicated since Ghana has already indicated that it is looking at haircuts of about 30% to 50%.
“I think that is going to be a bitter pill to swallow for a number of these commercial creditors”, he added.
Government sends proposal on debt restructuring to official creditors
The government is said to have sent a proposal on the restructuring of its external debt to its official creditors.
According to Reuters, the ‘working proposal’ is however not legally binding.