By Maxwell Akalaare Adombila and Karin Strohecker
WASHINGTON (Reuters) -Ghana agreeing a restructuring with holders of its international bonds is “a matter of time” rather than there being insurmountable hurdles, an IMF official said, after the fund said a previous proposed deal would not fit its parameters.
“It depends on … how much time and intensity the government is going to be able to devote to (bondholder negotiations) in the coming weeks,” African Department director Abebe Selassie said in an interview at the International Monetary Fund (IMF) Spring Meetings in Washington.
“It’s a matter of time rather than something pretty fundamental blocking it.”
The cocoa-, gold- and oil-producing country turned to the IMF for financial support in 2022, when debt costs and spiralling inflation led it to default at the end of the year on most of its $30 billion of external debt.
Ghana has not yet agreed a Memorandum of Understanding (Mou) with its official, bilateral creditors on a restructuring deal, the key to unlocking more IMF funding, Selassie told a separate press briefing on Friday.
“We are confident that it’ll happen in the next few weeks. Good progress is being made in the negotiations and drafting. I don’t think there will be dragging,” IMF Mission Chief for Ghana Stephane Roudet told reporters separately.
“(Economic) growth has surprised us to the upside… We will revise growth up in 2024,” he added.
Earlier this week, Ghana’s government said it had not been able to reach a workable restructuring agreement with two groups of holders of about $13 billion in overseas bonds and that talks would continue until it finds a deal consistent with the IMF’s debt-sustainability targets.
A bondholder said separately that the negotiation details made public did indeed breach the fund’s debt sustainability analysis for the first programme review, but there was confidence that the numbers would be more favourable for the second, which ended last week.
“We’re solving for the second review,” the bondholder said, requesting to remain anonymous due to the sensitivity of the talks. “We’re much closer than it appears.”
The IMF said last week that a new staff-level agreement on the second review of its $3 billion loan programme with Ghana would unlock a $360 million tranche, once the country and its official bilateral creditors reached an MoU consistent with the programme.
In the interview, Selassie repeated the fund’s position that a bondholder deal was not also necessary for the next loan disbursement to be approved by its board.
“What we want to see is that the government is having discussions. It (no deal) won’t stand in our way to go to the board,” he said.
“Debt restructurings are always difficult, even in countries where you don’t have this very complex creditor mix,” Selassie said.
“But even with that I want to be very clear: by historical standards, things are moving very quickly (for Ghana). But that’s not sufficient, we want to see deals happening a lot quicker.”
(Reporting by Maxwell Akalaare Adombila and Karin Strohecker, additional reporting by Nellie Peyton in Johannesburg and Rodrigo Campos in New York; Writing by Rachel Savage, Editing by Andrew Cawthorne and Hugh Lawson)
