By Maxwell Akalaare Adombila and Christian Akorlie
ACCRA (Reuters) -The International Monetary Fund’s executive board has approved a $3 billion, three-year extended credit facility for Ghana, three senior Ghanaian officials said on Wednesday, as the West African country tries to overcome its worst economic crisis in a generation.
Two other sources familiar with the process said the IMF agreement marked an important step for Ghana, but cautioned that authorities there faced long negotiations with creditors, pointing to Zambia where the process has been mired in delays.
The IMF and Ghana’s finance ministry did not immediately respond to requests for comment.
Ghana’s official sector creditors formed a committee co-chaired by China and France and agreed to debt restructuring talks, the Paris Club said last week. This paved the way for a sign-off on the IMF loan, which was agreed at staff level in December.
Ghana faces a debt overhaul after its already strained finances buckled under economic fallout from COVID-19 and Russia’s invasion of Ukraine.
It is negotiating its international debt rework under the Group of 20’s Common Framework platform and completed a domestic debt exchange earlier this year.
Some $5.4 billion of debt to official creditors has been earmarked for restructuring, according to government data, as well as $14.6 billion of debt to private overseas creditors.
Zambia, the first African country to default in the COVID-19 era, secured an IMF loan in September 2022 and still has not agreed debt restructuring terms with creditors.
Analysts expect Ghana’s process to be faster and smoother than Zambia’s since China holds a smaller proportion of Ghana’s debt. China is Zambia’s largest bilateral creditor and has been accused of delaying that country’s debt restructuring, which it denies.
It will have taken Ghana 156 days between securing a staff-level agreement on its $3 billion loan and getting IMF board approval, compared to 271 days for Zambia, where it took longer to secure sign-up to the process from bilateral creditors.
(Reporting by Maxwell Akalaare Adombila, Christian Akorlie, Andrea Shalal and Rachel Savage; Writing by Nellie Peyton and Anait Miridzhanian; Editing by James Macharia Chege and David Gregorio)
