According to sources who spoke to Reuters, Ghana is prepared to submit a request for debt relief under the G20 Common Framework program and has asked for assurances that the negotiations can move quickly.
The crisis-hit nation has been holding off because of the lengthy delays other nations employing the method have experienced, according to a source familiar with the government's thinking. The nation obtained a $3 billion staff-level deal with the International Monetary Fund (IMF) in mid-December.
To receive final authorization to borrow the IMF money, the West African nation must restructure its debt. Ghana started a domestic debt exchange in December and later declared it would stop making payments on almost all of its $28.4 billion in foreign debt.
According to the source, Ghana contacted the Paris Club of Creditor Countries in December to request guarantees that the Common Framework process, established by the Group of 20 Leading Economies in 2020 as a reaction to COVID-19, might be sped up.
The insider, who spoke on the condition of anonymity, claimed that if the administration received these guarantees, it would sign the Common Framework right away.
While declining to provide any information, a Paris Club representative told Reuters that the organization had received a letter from the government of Ghana.
It is difficult to imagine Ghana doing anything other than agreeing to the Common Framework because they have given themselves no other options, according to a source with knowledge of Ghana's debt restructuring.
According to a third source who is aware of the IMF's thinking, Ghana's participating in the Common Framework Programme is currently under discussion and would be the most likely conclusion as well as the Paris Club's preferred course of action.
The Common Framework, which was intended to allow for quick debt reworks, has received harsh criticism for moving at a glacial pace. Early in 2021, Chad, Ethiopia, and Zambia joined. While Zambia is currently in negotiations, Chad was able to reach an agreement with its creditors in November. The civil war in Ethiopia hindered its development.
An inquiry for comment was not answered by the Ghanaian finance ministry.
Ghana's finance minister, however, stated that the Common Framework was "ridden with issues" and that the government would require assurances of speed before signing it in order to avoid "derailing momentum" on the day the IMF accord was revealed.
Only poorer countries may request a Common Framework treatment, which will result in the formation of an official creditor committee and negotiations with the backing of the IMF and the World Bank.
Alternately, a nation seeking to restructure can do so by engaging in separate negotiations with each creditor.
According to the Institute of International Finance, Ghana's public debt was 467.4 billion cedis ($47.7 billion) in September 2022, of which $4 billion was bilateral. Paris Club nations held $1.9 billion of that, and China held $1.7 billion.
Previous statements made by some of Ghana's $13 billion in offshore sovereign dollar bonds holders indicated that they would rather the nation avoid what they saw as a protracted and fruitless procedure.