UK debt deal unlocks £170m for stalled projects

By Joshua Worlasi AMLANU

The government has sealed a bilateral debt restructuring agreement with the United Kingdom, paving the way for the restart of infrastructure projects worth about £170 million (US$207 million).

The deal with UK Export Finance (UKEF) extends repayment of Ghana’s bilateral debt to the UK by 15 years. It forms part of the country’s broader external debt restructuring under the G20 Common Framework, which followed its 2022 default. Ghana recently reached similar agreements with France and China.

Finance Minister Cassiel Ato Forson said the deal would ease fiscal pressure and unlock funds to restart five projects suspended when Ghana halted external debt service.

“This will unlock five major projects,” he said at the signing ceremony in Accra.

He noted that inflation is falling and growth is rebounding, but noted that, “We have recovered more or less, but I always say that we are not out of the woods yet. So we are proceeding cautiously.”

The projects set to resume include the Bolgatanga-Bawku-Pulmakom road in northern Ghana, the second phase of the Obetsebi Lamptey Interchange in Accra, redevelopment of the Kejetia Market in Kumasi, construction of a maternity and children’s block at Komfo Anokye Teaching Hospital, and the Tema-Aflao road corridor. Together, they are expected to expand trade routes, improve access to healthcare, and strengthen urban transport links.

The projects were originally backed by UKEF, the UK’s export credit agency, but stalled after Ghana’s debt suspension. Resumption will not only provide infrastructure improvements but also reinforce trade ties between the two nations, according to officials.

John Humphrey, the UK’s Trade Commissioner for Africa, said the agreement reflects “confidence, partnership and shared ambition” between the two countries.

“By restructuring this debt in partnership with the Paris Club and G20, we’re creating the fiscal space Ghana needs to deliver on its bold vision for the future, including the 24-hour economy and the Big Push initiatives,” he added.

Ghana is seeking to restore debt sustainability under a US$3 billion programme with the International Monetary Fund. The restructuring with the UK covers about US$256 million, according to Forson. He said the resumption of projects would provide immediate economic dividends by creating jobs and stimulating activity in the real economy.

The UK government framed the deal as part of its effort to deepen long-term trade and investment links with Ghana.

“This will unlock up to an additional £170 million to complete key infrastructure projects being delivered by UK exporters, projects that will create jobs, drive growth and strengthen the foundations of Ghana’s economy,” The Commissioner said.

The country defaulted on most of its external debt two years ago after surging inflation, currency depreciation and rising interest costs made its obligations unsustainable. The government has since restructured domestic debt, reached an interim deal with bilateral creditors, and is in talks with bondholders to finalize an agreement on US$13 billion of Eurobonds.

The minister said the UK agreement “sends a signal to the rest of our bilateral partners that are yet to sign”.

 

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