ACCRA: Ghana has reached an agreement with external creditors for a debt restructuring that was key to its $3 billion credit line with the IMF, the government and the lender said.

Facing its worst economic crisis in decades, Ghana agreed to a loan from the International Monetary Fund (IMF) to help shore up its public finances and better manage its heavy debt load.

Ghana’s economic outlook will be a major part of campaigning for the presidential election in December when President Nana Akufo-Addo’s New Patriotic Party will seek an unprecedented third term in office.

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Ghana received its first $600 million tranche of the IMF loan in May last year.

The external debt deal helps clear the way for approval of another $600 million payment.

“This development constitutes a significant positive step towards restoring Ghana’s long-term debt sustainability,” a Finance Ministry statement said late Friday.

Last year Ghana successfully carried out a restructuring of its domestic debt.

Ghana suspended payments on the majority of its external debt, essentially defaulting due to challenges in addressing its substantial balance of payments deficit.

The restructuring parameters encompass both bilateral and commercial debt, including Eurobonds.

IMF managing director Kristalina Georgieva welcomed Ghana reaching “an agreement in principle with their official creditors on a debt treatment, consistent with the objectives of the IMF-supported program, which aims to restore macroeconomic stability and debt sustainability”.

She said the deal “clears the path for IMF Executive Board consideration” of the first review of Ghana’s three-year agreement “in the next few days”.

The Ghanaian government expects approval from the IMF Board will also prompt the World Bank Board to review $300 million in development financing for the country.