Ghana seeks to exempt Afrexim loans from restructuring

Accra — Ghana aims to exempt loans from the African Export & Import Bank (Afreximbank) from being restructured, finance minister Ken Ofori-Atta says, as the country seeks new terms on $20bn 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 $10.5bn over the next three years to qualify for the next tranche of a $3bn loan deal from the IMF.

“I have to find a way to do it. It’s difficult but we will force and we will see,” Ofori-Atta said, adding the bank had helped the country through its most difficult period.

The West Africa nation secured a $750m 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.

Afreximbank president Benedict Oramah said in May that the treaty establishing the bank, which Ghana signed, prohibited 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, an official with the Paris Club, which co-ordinates developed creditor nations. said.

“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 $5.4bn of the $20bn external debt due for restructuring, as of the end of 2022, a government presentation to investors showed. The total external debt stock was about $30bn.

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 $750m, with a seven-year tranche split into €100m with a total interest rate of 6.49% including fees, and $101m at 9.55%.

A second 10-year tranche of $350m had a rate of 9.33%, according to a report by a Ghanaian parliamentary committee when the loan was approved last year.

Reuters