https://en.sputniknews.africa/20231014/g20-encourages-steps-to-restructure-zambias--ghanas-debts-1062782738.html
G20 Encourages Steps to Restructure Zambia's and Ghana's Debts
G20 Encourages Steps to Restructure Zambia's and Ghana's Debts
Sputnik Africa
The need for debt restructuring was necessitated by Zambia's declared default on its $18.6Bln foreign debt in 2020. In December 2022, Ghana also defaulted on... 14.10.2023, Sputnik Africa
2023-10-14T11:33+0200
2023-10-14T11:33+0200
2023-10-14T12:39+0200
sub-saharan africa
ghana
west africa
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southern africa
international monetary fund (imf)
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debt restructuring
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The G20 finance chiefs have hailed the "advanced work" to finalize a memorandum of understanding on Zambia's debt settlement and "ongoing progress" on Ghana, the British media said, citing a draft communique.The communique also said the leaders urged an early conclusion of debt negotiations being conducted for Ethiopia and Sri Lanka.As the media noted, the support of G20 financial leaders is aimed at making it easier to implement debt relief plans.A month later, the nation's foreign bondholders signed non-disclosure agreements with the southern African country's government, marking the start of formal negotiations to restructure more than $3Bln of international bonds. The move would allow Zambia to save $7.65Bln by 2026, according to the IMF.Zambia's Finance Minister Situmbeko Musokotwane announced on Thursday that he "hoped" a memorandum of understanding on its debt restructuring with official creditors would be signed next week.However, some experts warned - emphasizing the importance of the agreement for the country as a whole - that the deal was arranged by the IMF and therefore requires some adjustments to the country's economic policy in accordance with the financial institution's prescriptions. In particular, Hannah Ryder, chief executive of Development Reimagined and a senior associate at the Africa Program of the Center for Strategic International Studies, told Sputnik Africa in June that Zambian citizens will have to face lower fuel and food subsidies, something which in many countries often triggers protests and potentially leads to an economic downturn.As for Ghana, the gold, cocoa and oil-exporting country - which defaulted on most of its foreign debt in December - is seeking to cut interest payments on its foreign debt by $10.5Bln over the next three years as part of an IMF bail-out received in May.The nation is looking for a program of debt-service relief to run between 2023 and 2026 as it negotiates a $20Bln external debt restructuring with creditors including China and the Paris Club, as well as international bondholders.
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ghana, west africa, zambia, southern africa, international monetary fund (imf), debt, debt restructuring, g20
G20 Encourages Steps to Restructure Zambia's and Ghana's Debts
11:33 14.10.2023 (Updated: 12:39 14.10.2023) The need for debt restructuring was necessitated by Zambia's declared default on its $18.6Bln foreign debt in 2020. In December 2022, Ghana also defaulted on most of its foreign debt.
The G20 finance chiefs have hailed the "advanced work" to finalize a memorandum of understanding on Zambia's debt settlement and "ongoing progress" on Ghana, the British media said, citing a draft communique.
The communique also said the leaders urged an early conclusion of debt negotiations being conducted for Ethiopia and Sri Lanka.
As the media noted, the support of G20 financial leaders is aimed at making it easier to implement debt relief plans.
In June, Zambia achieved an agreement with bilateral creditors to restructure $6.3Bln in debt, the first major relief received by a developing nation under the Group of 20 countries' Common Framework.
A month later, the nation's foreign bondholders signed non-disclosure agreements with the southern African country's government, marking the start of formal negotiations to restructure more than $3Bln of international bonds. The move would allow Zambia to save $7.65Bln by 2026, according to the IMF.
Zambia's Finance Minister Situmbeko Musokotwane announced on Thursday that he "hoped" a memorandum of understanding on its debt restructuring with official creditors would be signed next week.
However, some experts warned - emphasizing the importance of the agreement for the country as a whole - that the deal was arranged by the IMF and therefore requires some adjustments to the country's economic policy in accordance with the financial institution's prescriptions.
In particular,
Hannah Ryder, chief executive of Development Reimagined and a senior associate at the Africa Program of the Center for Strategic International Studies, told Sputnik Africa in June that Zambian citizens will have to face lower fuel and food subsidies, something which in many countries often triggers protests and potentially leads to an economic downturn.
As for Ghana, the gold, cocoa and oil-exporting country - which defaulted on most of its foreign debt in December - is seeking to cut interest payments on its foreign debt by $10.5Bln over the next three years as part of an IMF bail-out received in May.
The nation is looking for a program of debt-service relief to run between 2023 and 2026 as it negotiates a $20Bln external debt restructuring with creditors including China and the Paris Club, as well as international bondholders.
