The Minister of Finance, Dr Mohammed Amin Adam has presented the mid-year review of the 2024 budget of the Government of Ghana.
A key element in the fiscal policy is an update on Ghana’s debt restructuring programme.
Here is an excerpt of the presentation by Dr Amin Adam:
Update on Domestic Debt Exchange Programme
62.Mr. Speaker, I am pleased to report that Government has made substantial
progress since the completion of the Domestic Debt Exchange Programme
(DDEP) in September 2023. We have successfully honoured two coupon
payments, with the second payment of about GH¢5.9 billion in February
2024. Furthermore, we are on track to make the third coupon payment of
GH¢6.1 billion in August 2024. The timely payments of these coupons will
undoubtedly improve investor confidence in the domestic market and bolster
the overall economy.
Progress on restructuring of official bilateral debt
63.After an eight (8) month period of negotiations, Government and the Official
Creditor Committee (OCC) reached an agreement in principle on 12th January,
2024 outlining the broad parameters for the restructuring of official bilateral
debt.
64.Subsequently, on 11th June, 2024, Government and the OCC reached
agreement on an MoU covering the restructuring of about US$5.1 billion of
the official bilateral debt.
65.Mr. Speaker, I am pleased to report that this agreement resulted in debt service
relief amounting to US$2.8 billion over the course of the IMF programme
period (2023-2026), providing critical liquidity support.
66.Mr. Speaker, the MoU will serve as the guiding document for amending
individual country claims. The next critical step is the direct engagement with
the bilateral creditors to implement the mutually agreed restructuring terms.
Update on Eurobond Holders
67.Mr. Speaker, Government is committed to securing debt treatment from all
other external creditors consistent with the comparability of treatment principle
enshrined in the G20 Common Framework.
68.We are pleased to announce that on 24th June, 2024, Government reached an
agreement in principle with the Eurobond holders committees to restructure
approximately US$13.1 billion of outstanding Eurobonds. Additionally, it
reduces the nominal value of the outstanding Eurobonds by US$4.7
billion and provides debt service relief of about US$4.4 billion during the
programme period.
69.Mr. Speaker, the debt restructuring will result in reducing the present value of
our public debt to 55 percent by 2028, as embedded in the IMF-supported
PC-PEG programme.
Progress on restructuring of other commercial loans
70.Mr. Speaker, the Government of Ghana remains committed to engaging in good
faith negotiations with other commercial external creditors, comprising
primarily private banks and suppliers or contractors that have provided
commercial loan facilities.
71.Our objective is to finalise restructuring agreements with these creditors that
uphold the principle of comparability of treatment and addresses Ghana’s
requirement for debt relief, ensuring a comprehensive and sustainable
approach to our external debt obligations.
72.The debt restructuring has been a crucial pillar of Ghana’s economic recovery
following the 2022 crisis. It has helped to restore confidence in the economy
and the following benefits are evident:
• rapid restoration of macroeconomic stability and debt sustainability;
• avoidance of steeper fiscal adjustment;
• creation of fiscal space for development spending; and
• prevention of a domestic and external banking crisis.
73.Mr. Speaker, despite the benefits, we remain committed to exercising caution,
informed by the lessons learned from our experiences and the sacrifices of
every Ghanaian. Our debt strategy going forward includes deepening reforms
to ensure irreversibility and building buffers to reduce vulnerabilities and enhance resilience.
