Ghana is in the throes of its worst economic crisis in decades and has requested a restructuring of its debt.
All member countries of the G20 group of economic powers are on board for a restructuring of Ghana’s debt and Paris Club members are ready to take the first step towards forming a creditor committee, an official from the Paris Club told Reuters on Thursday.
Ghana last week requested a restructuring of debt it owes to other governments, becoming the fourth country after Chad, Ethiopia and Zambia to do so under a G20 Common Framework.
The programme, which was launched in 2020, was supposed to streamline the process of coordinating among creditor governments the restructuring of low-income countries’ debts after the pandemic.
However, progress has proven glacial for the first cases, a situation Western countries have said is in part due to a lack of restructuring experience from China, a non-Paris Club G20 creditor that has become a major lender in recent years.
“There is a commitment by the leaders to form the creditor committee, so it’s a question of time. We know that all the G20 members are committed to undertake the debt treatment under the Common Framework,” the Paris Club official told journalists.
The official requested they not be named to speak freely about the restructuring situation.
Forming a creditor committee took a couple of months for previous cases but the official said the Paris Club members were all ready to do so for Ghana and hoped it could be done in a month.
The official said Ghana’s case was less complex than Zambia, whose case the official said was progressing after struggling since it became the first African country to default after the pandemic.
“We think that the process will become smoother and smoother on the basis of the previous cases,” the official said, adding that Ghana’s authorities had sought assurances its case would be dealt with in a “timely manner”.
Ghana launched a domestic debt swap plan at the start of December, days before clinching a staff-level agreement with the International Monetary Fund for a $3bn rescue package.
Its public debt stood at 467.4 billion Ghanaian cedis ($55bn according to Refinitiv Eikon data) in September, of which 42 percent was domestic.