Ghana aims to exempt loans from the African Export & Import Bank (Afreximbank) from being restructured, finance minister Ken Ofori-Atta said, as the country seeks new terms on $20 billion in external debt and recovery from a deep economic crisis.
The gold-, cocoa- and oil-exporter, which defaulted on most external debt in December, aims to reduce its external debt repayments by $10.5 billion over the next three years to qualify for the next tranche of a $3 billion loan deal from the International Monetary Fund (IMF).
“I have to find a way to do it. It’s difficult but we will force and we will see,” Ofori-Atta told Reuters in an interview, adding the bank had helped the country through its most difficult period.
The West Africa nation secured a $750 million loan from Afreximbank in July 2022, when it was locked out of global capital markets after yields on its international bonds soared, its credit ratings were downgraded and its currency collapsed.
Afreximbank has said it should be classed as a multilateral development lender, whose loans usually are not subject to writedowns during debt restructurings.
Benedict Oramah, President and Chairman of Afreximbank, told Reuters in May that the treaty establishing the bank, which Ghana signed, prohibits all countries from subjecting its loans to moratoriums and restructuring.
“So, they (are) just respecting, complying with their own law because Ghana has adopted, ratified and gazetted the treaty,” he said.
Afreximbank is considered a commercial creditor, said an official with the Paris Club, which coordinates developed creditor nations.
“We are not looking at such detailed points so far. This is something that we will address in the creditor committee,” the official said, asking not to be named due to the sensitivity of negotiations.
“The multilateral thing has been defined to mean something like Washington-based, but we will see,” said Ofori-Atta, referring to the Washington DC-based IMF and World Bank.
Ghana’s debts to countries including China and Paris Club members were $5.4 billion of the $20 billion external debt due for restructuring, as of the end of 2022, a government presentation to investors showed. The total external debt stock was about $30 billion.
Ofori-Atta told a news conference on Sunday that Ghana aimed to reach agreement with bilateral creditors in “the coming weeks”.
The Afreximbank loan Ghana took out last year was for up to $750 million, with a seven-year tranche split into 100 million euros ($109.3 million) with a total interest rate of 6.49% including fees, and $101 million at 9.55%.
A second 10-year tranche of $350 million had a rate of 9.33%, according to a report by a Ghanaian parliamentary committee when the loan was approved last year.