Reuters reports that Ghana on Tuesday asked to restructure its bilateral debt under the G20-backed Common Framework platform, according to a source familiar with the situation.
The crisis-hit nation becomes the fourth country to apply to benefit from the G20 initiative launched in 2020 and designed to streamline debt restructuring efforts in the wake of poorer countries struggling under the fallout of the COVID-19 pandemic .
“Ghana has just become the fourth country to seek treatment under the Common Framework, sending a signal that it is seen as an important route to debt resolution,” Ms Georgieva said in a blog post.
Ghana’s debt restructuring under the Common Framework aims to include non-Paris Club countries, such as China, in debt relief talks. China is Ghana’s largest bilateral creditor with $1.7 billion in debt, while the country owes Paris Club members $1.9 billion, according to data from the International Institute of Finance (IIF). ).
Reuters first reported earlier this month that Ghana was seeking debt relief under the G20 programme.
Ghana, which landed a $3 billion staff-level deal with the International Monetary Fund (IMF) in mid-December, has been reluctant to apply because of the long lead times faced by other countries using this process. .
The Common Framework, designed to enable rapid debt restructuring, has been widely criticized for its glacial progress. Chad, Ethiopia and Zambia joined in early 2021. While Chad reached an agreement with its creditors in November, Zambia is still in talks. Ethiopia’s progress has been hampered by civil war.
“Countries seeking to restructure their debt under the Framework will need greater certainty about processes and standards, as well as shorter and more predictable timelines,” Georgieva told the blog on Sunday.