Ghana’s efforts to reach a debt agreement with bondholders are thwarted by IMF objections

Ghana’s attempt to reach an agreement with a consortium of foreign bondholders to assist in restructuring its $13 billion debt has failed.

The government of Ghana revealed on Monday that its endeavors to restructure its $13 billion debt with foreign bondholders have encountered an obstacle, posing a hindrance to its endeavors to surmount default and economic difficulties.

The agreement was opposed by the International Monetary Fund (IMF), which raised issues with its consistency with an examination of debt sustainability, which establishes limits on the amount of debt that a nation can afford.

The bondholder group also rejected a portion of the planned restructuring, which included a “par option” with a longer duration and a lower coupon meant to maintain the bond’s original value.

After being shut out of international markets, Ghana experienced a spike in debt costs and inflation, leading to a default on the majority of its $30 billion foreign debt in December 2022.