Ghana completes external debt restructuring programme

Ghana has successfully concluded its debt restructuring program with official creditors and Eurobond holders, Finance Minister Dr. Mohammed Amin Adam has announced.

Ghana restructured $5.1 billion in debt with official creditors and $13.1 billion with Eurobond holders, achieving substantial financial relief.

Addressing attendees at a UK Town Hall meeting, Dr. Amin Adam highlighted the government’s adept negotiation skills, which secured $8 billion in savings.

“Two weeks ago, we finalized negotiations with official creditors, restructuring $5.1 billion and securing $2 billion in savings,” he stated. “We have now also concluded negotiations with Eurobond holders on the $13.1 billion debt, we have negotiated a good deal for Ghana and that is $8 billion in savings”.

The restructuring efforts, part of a broader strategy to meet IMF targets, include delayed interest payments and extended maturity dates with bilateral creditors. To align with the IMF’s requirements, Ghana aims to reduce its debt-to-GDP ratio to 55% by 2028, down from a projected 109% prior to the restructuring.

Ghana’s economy has outperformed expectations, expanding by 2.9% in 2023 compared to the IMF’s initial forecast of 1.5%. This robust growth supports a revised Debt Sustainability Analysis (DSA), accommodating for the new agreement with bondholders, Dr. Amin Adam noted.

The current bondholder agreement would leave the country’s public debt slightly above the 55% target.

Ghana’s debt restructuring journey began over a year ago, following an agreement in principle with bilateral creditors under the G20 Common Framework for Debt Treatment. This set the foundation for subsequent negotiations with Eurobond holders, culminating in the current agreement.

The successful restructuring marks a critical step in stabilizing Ghana’s economy and achieving long-term fiscal sustainability.

Source: Norvanreports