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Tag: AFREXIMBANK

  • Ghana, Afreximbank resolve US$750 million facility dispute

    Ghana, Afreximbank resolve US$750 million facility dispute

    The Ministry of Finance has announced that Ghana and Afreximbank have reached a successful resolution regarding the $750 million facility.

    In a joint statement, the Ministry of Finance and Afreximbank disclosed that all issues relating to the $750 million facilities signed in 2022 have been resolved, “with the satisfaction of both parties enabling both parties to continue to partner for Ghana’s development agenda.”

    Background

    On July 20, 2022, Parliament, at its 31st sitting of the Second Meeting of the Second Session, approved by resolution the Loan Facility Agreement between the Government of Ghana, represented by the Ministry of Finance, and the African Export-Import Bank (Afreximbank).

    The move was influenced by challenges in securing funds from the capital market due to downgrades by all major ratings agencies.

    The facility was disbursed in three tranches, two denominated in US dollars and one in euros: US$187 million, €193 million, and US$332 million.

    The government was expected to enjoy a three-year grace period or moratorium for the facility. However, the US$187 million and €193 million tranches would have a tenor of seven years, while the US$332 million tranche would have a tenor of ten years.

    Sources say the government executed the facility agreement in August and met all conditions precedent for disbursement. The utilisation request was signed in August, and the government received SWIFT confirmation of the successful transfer of funds into the Bank of Ghana designated accounts on August 25, 2022.

     

    The Government of Ghana’s decision to include Afreximbank’s debts in a broader commercial debt restructuring plan, triggered by its IMF-backed bailout, did not go down well with Afreximbank.

    Afreximbank argued that its debts should be treated in the same way as Ghana’s obligations to the IMF and World Bank.

    Ghana, on the other hand, insisted that Afreximbank is not a multilateral institution and should therefore not be excluded from the restructuring. Afreximbank disagreed, arguing that it meets the criteria of a multilateral institution and should be spared from debt haircuts.

    This disagreement contributed to Fitch’s June 2025 downgrade of Afreximbank’s credit rating to just above junk status, citing uncertainty created by the debt positions of Ghana and Zambia.

    Despite this, government officials at a meeting in Abuja told JOYBUSINESS that positive progress had been made toward resolving the dispute.

    The joint statement, however, did not provide detailed information on the specific terms of the resolution reached between Ghana and Afreximbank.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • BoG awaits US$2.05b to shore up reserves

    BoG awaits US$2.05b to shore up reserves

    By Elorm Desewu

    The Bank of Ghana is expecting a total of US$2.05 billion in the next couple of months to shore up the country’s Gross International Reserves.

    Already, the US$750 million loan from the African Export Import Bank (AFREXIMBANK) has hit the accounts of BoG and now waiting for the US$1.3 billion cocoa syndication loan.

    The BoG is hopeful that this money would help the central bank to build a strong reserves, imrpove on the country’s balance of payment and also stabilize the local currency, the cedi which has continue to depreciate since the beginning of this year.

    it is likely that the country reserves would hit a record high of US$9.75billion if all the monies hit the central bank’s account.

    The Gross International Reserves declined significantly to US$7.7 billion at the end of June 2022, equivalent to 3.4 months of import cover, compared with US$9.7 billion which was 4.3 months of imports at the end of December 2021.

    The decline in the reserve buffer, alongside unfavourable global financing conditions, exerted significant pressures on the foreign exchange market. On the interbank forex market, the

    Ghana Cedi cumulatively depreciated against all the three major currencies; 19.2 percent against the US dollar, 8.8 percent against the Pound Sterling, and 10.0 percent against the Euro as at July 20, 2022.

    Parliament approved a plan by the government to borrow up to $750 million from the African Export-Import Bank for the 2022 budget.

    The loan proceeds are expected to make room for the country to reduce domestic borrowing and put it in a stronger position to support the local currency.

    The government is on course to seek a funded program with the International Monetary Fund after a decision early in the year to cut budget expenditures by as much as 30% failed to stem a sell-off in its international bonds.

    Ghana’s recent debt woes were caused by a sweeping clean-up of the banking sector, energy-sector loans, the impact of the coronavirus pandemic and the fallout from Russia’s invasion of Ukraine, driving its debt ratio to 78.3% of gross domestic product at the end of June from 76.6% at the of December, 2021. The country hopes to receive about $3 billion from the IMF program to enhance the home-grown policies it is already implementing.