Ghana's government said on Monday that it had reached an agreement in principle with bondholder groups to restructure its international debt.

Under the agreement, bondholders would forego approximately $4.7 billion of their claims and provide cash flow relief of approximately $4.4 billion during the period of Ghana's International Monetary Fund programme.

The West African nation gold and cocoa producer defaulted on most of its $30 billion in external debt in 2022, under the strain of the COVID-19 pandemic, the war in Ukraine and higher global interest rates.

It started formal talks with two groups of bondholders in mid-March- a group of Western asset managers and hedge funds and another one including regional African banks.

The negotiations, however, stalled in April after the proposed deal failed to meet the International Monetary Fund's debt sustainability analysis requirements, and both sides were under pressure to finalise an agreement before December elections in Ghana.

Investors are watching Ghana's debt restructuring closely after Zambia's bondholders signed off on the southern African nation's own debt overhaul which was more than three years in the making.

(Reporting by Prerna Bedi and Shanima A in Bengaluru, and Alexander Winning in Johannesburg)