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Finance Minister announces official end to Ghana’s debt restructuring

Dr Mohammed Amin Adam

The Finance Minister, Dr Mohammed Amin Adam, has announced that Ghana has completed its debt restructuring program with its official creditors. The government has successfully restructured its $5.1 billion debt with these creditors, as well as concluded the restructuring of $13.1 billion with Eurobond holders.

Addressing attendees at a UK Town Hall meeting, Dr Amin Adam highlighted that these efforts have resulted in savings of 8 billion dollars for the country. “Last two weeks, we concluded negotiations with the official creditors, and we have agreed to restructure 5.1 billion dollars. I am telling you that the government is good in negotiations and of this amount, we are going to make savings of $2 billion.”

“As I speak to you, tomorrow morning, there will be an announcement that we have also concluded our negotiations with the Eurobond Holders of $3.1 billion, and ladies and gentlemen, when we announce it, please read the details. We have negotiated a good deal for Ghana and that is $8 billion,” he said. “Ideally, government should not be held responsible for the investment decisions of individuals, but this government is so caring.

“Mistakes were made and people were not well-informed, and they didn’t know who to consult to be advised, but we also know that the people who are affected are suffering, and we have heard that some people have died and others had to commit suicide.”

“This government is so caring that in the first place, we granted some bailout to all the affected and I want to tell you again that the President has directed that we do another bailout. So between now and October, we will release ¢1.5 billion to the affected people.”

The government recently secured delayed payment on interests and postponement on the maturity date in a restructured debt deal with bilateral creditors.  To meet its IMF target, the $77 billion economy needs to reduce debt to 55% of gross domestic product by 2028, compared with a burden of 109% projected for the year before Ghana began restructuring.

The current bondholder agreement would leave debt slightly above that target. Ghana’s economy fared better than the IMF expected, expanding 2.9% in 2023 compared to an initial IMF target of 1.5%. That means a revised DSA would accommodate the agreement with bondholders, Adam said.

Ghana began working to revamp its debt a little over a year ago as part of a deal with the International Monetary Fund, reaching an agreement in principle with bilateral creditors in January to rework $5.4 billion of obligations under the Group of 20 Common Framework for Debt Treatment. That agreement set the tone for the restructuring of Eurobond debt.

By: Ernest K. Arhinful

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