Latest news with #OfficialCreditorCommittee
Daily News Egypt
02-07-2025
- Business
- Daily News Egypt
Ethiopia Secures $3.5bn Debt Relief under G20 Framework
Ethiopia has reached a significant milestone in its ongoing efforts to address mounting external debt, securing a $3.5bn debt relief package through an agreement with its Official Creditor Committee (OCC), the Ministry of Finance announced on Wednesday. The memorandum of understanding was concluded under the G20 Common Framework for Debt Treatments, a multilateral initiative aimed at supporting low-income countries facing debt distress. While the financial scope of the agreement has been disclosed, specific terms and conditions — including what Ethiopia may be offering in return — have not been made public. In an official statement, the Ministry of Finance described the agreement as 'an important milestone in Ethiopia's journey towards achieving long-term public debt sustainability,' marking the culmination of a years-long negotiation process with its official creditors. The ministry extended particular appreciation to China and France, co-chairs of the OCC, citing their 'steadfast support and collaboration' throughout the debt treatment discussions. The names of other participating creditors have not yet been revealed. Ethiopia's external debt currently stands at over $28 billion, and the government has actively pursued international diplomatic efforts to restructure its obligations. Wednesday's announcement signals progress in that campaign, although key implementation details remain pending. According to the Ministry, the next phase will involve the signing of bilateral agreements with individual OCC member states, which will initiate the implementation of the agreed debt relief terms. A timeline for this stage has not yet been provided. The development comes amid growing fiscal pressure on the Ethiopian government, which has faced challenges in managing public finances following years of political and economic instability.
Reuters
02-07-2025
- Business
- Reuters
Ethiopia says it formalises debt rework with official creditors
ADDIS ABABA, July 2 (Reuters) - Ethiopia said on Wednesday it had agreed a memorandum of understanding with its Official Creditor Committee that formalises an initial debt restructuring deal reached earlier this year. The debt rework offers relief of more than $3.5 billion, the finance ministry said in a statement. The Horn of Africa nation opted to restructure its external debt under the G20's Common Framework in 2021, before it defaulted on its sole Eurobond in December 2023. It hopes the formal agreement with its official creditors will help it seal deals with other creditors, such as its bondholders, the finance ministry said. Ethiopia has been locked in a standoff with a group of investors in its $1 billion Eurobond , which matured in 2024. "Ethiopia continues to engage in good faith with all its other participating external creditors and seeks to conclude restructuring agreements on terms compatible with the country's need for debt relief and the comparability of treatment principle," said Eyob Tekalign Tolina, state finance minister. When Ethiopia announced the preliminary deal with its official creditors in March, it said the agreement would provide some $2.5 billion of relief over 2023 to 2028, the period of its International Monetary Fund programme. Ethiopia's Official Creditor Committee is co-chaired by France and China. The Paris Club of creditor nations, which usually handles communications for Ethiopia's OCC, did not immediately respond to a request for comment. The IMF's Executive Board is scheduled to meet on Wednesday to sign off on the latest review of its $3.4 billion loan programme, which would trigger a payout on the next tranche. The country's bonds stood unchanged at around 92 cents on the dollar, their highest level in four years, Tradeweb data showed. This is well above the 70 cents threshold below which debt is considered distressed and indicates that investors do not expect to suffer major writedowns. Other African countries Ghana, Zambia and Chad have restructured their external debts under the Common Framework.
Zawya
02-07-2025
- Business
- Zawya
Ethiopia agrees debt restructuring memorandum with official creditors, state news agency says
Ethiopia has agreed a memorandum of understanding with its Official Creditor Committee on debt restructuring, the government's official news agency said on Wednesday. The memorandum formalises the debt restructuring agreed in principle in March this year and offers relief of over $3.5 billion, the Ethiopian News Agency said. (Reporting by George Obulutsa; Editing by Alexander Winning)
Business Insider
26-06-2025
- Business
- Business Insider
Ghana approves $2.8bn debt relief deal with 25 nations to support IMF bailout
Ghana's Parliament has unanimously approved a $2.8 billion debt restructuring agreement with 25 creditor countries, including China, France, the United States, Germany, and the United Kingdom. Ghana's Parliament approved a $2.8 billion debt restructuring agreement involving 25 creditor nations. The agreement enables further disbursements under Ghana's $3 billion IMF bailout programme. The restructuring provides debt service relief with repayments deferred to 2039–2043. The move paves the way for continued disbursements under Ghana's $3 billion International Monetary Fund (IMF) bailout programme, aimed at addressing the country's most severe economic crisis in decades. The West African country, known globally as the world's second-largest cocoa producer, had defaulted on most of its external debt in December 2022. In January 2025, Ghana reached a Memorandum of Understanding (MoU) with the Official Creditor Committee, marking a significant milestone in its debt recovery path. Debt relief and extended repayments According to a parliamentary report seen by Reuters, the restructuring provides a debt service relief of $2.8 billion during the IMF-supported programme period (2023–2026). The agreement entails the rescheduling and capitalisation of debt service payments originally due between 20 December 2022 and 31 December 2026. These deferred payments will now be repaid between 2039 and 2043, effectively pushing repayments forward by over 15 years. The Official Creditor Committee has agreed on interest rates ranging from 1% to 3%, based on the original contractual terms—rates that are significantly lower than current market levels, offering Ghana's treasury meaningful fiscal space. Parliament backs deal as essential for economic stability The report noted: 'The Committee observed that the debt restructuring was essential to support the government's efforts in restoring and sustaining macroeconomic stability and ensuring long-term debt sustainability.' Lawmakers unanimously recommended the approval of the agreement, underlining the importance of international cooperation in Ghana's economic recovery process. IMF programme and next steps The IMF initially approved Ghana's three-year $3 billion loan package in May 2023, helping stabilise the country's currency, ease inflationary pressures, and improve investor confidence—contributing to a credit rating upgrade by Fitch Ratings.
Arabian Post
26-06-2025
- Business
- Arabian Post
Ghana Parliament Greenlights $2.8 Billion Debt Relief Deal
Ghana's parliament has given approval to a $2.8 billion debt restructuring agreement with 25 creditor nations, including China, France, the United States, Germany and the United Kingdom. This authorisation is vital for unlocking further disbursements from a $3 billion IMF-backed bailout programme initiated in May 2023. Lawmakers, endorsing the restructuring unanimously, approved measures under a memorandum of understanding signed in January 2025 that reschedule debt payments falling due between 20 December 2022 and 31 December 2026. Repayment has been deferred until the 2039–2043 period, affording Ghana over 15 years of fiscal breathing space. Interest on the restructured debt will be set between 1% and 3%, significantly below prevailing market rates. This intervention, coordinated through the Official Creditor Committee, is poised to fortify Ghana's macroeconomic stability by easing immediate liquidity pressures and supporting long-term debt sustainability. ADVERTISEMENT Since defaulting on most of its external debt in December 2022, Ghana—Africa's second-largest cocoa producer—has worked to stabilise its economy amid high inflation, a depreciating currency and contractionary pressures. The IMF bailout has helped to arrest market downgrade momentum, including a ratings revision from Fitch. Finance Minister Cassiel Ato Forson described the deal as a turning point, enabling a reduction in debt-to-GDP to around 55% by 2026 and the debt-service-to-revenue ratio to fall below 18% by 2028. He noted the government plans to channel the fiscal space created into critical development sectors such as infrastructure, agriculture and energy. Despite official creditor backing, Ghana still faces negotiations with commercial creditors over approximately $2.7 billion in private loans. These discussions, guided by the 'comparability of treatment' principle and the most-favoured-creditor clause, aim to prevent preferential terms and ensure cohesion between official and commercial agreements. Analysts caution that failure to finalise terms with private lenders could delay full debt relief and weigh on investor confidence, even as official support strengthens. This parliamentary action is expected to unlock the next IMF tranche under the three-year programme, which will in turn support Ghana's ongoing fiscal consolidation and monetary stabilisation efforts. Reaction from the business community has been cautiously optimistic. Observers note that by deferring large debt repayments until the late 2030s and capping interest rates, Ghana can prioritise capital investments and social spending in the short to medium term. However, success will be contingent on continued IMF compliance, central bank tightening to curb inflation, and the outcome of upcoming commercial creditor talks. As Ghana progresses towards formalising these bilateral agreements, experts suggest that solidifying its economic reform agenda will be essential. Any reversal or lack of follow-through risks undermining the country's debt trajectory ahead of contested elections scheduled for 2026.
