Ghana Saves $5bn From Debt Restructuring

Dr. Mohammed Amin Adam

 

Ghana has successfully restructured its $13 billion Eurobond debt, marking a significant milestone in the country’s economic recovery efforts.

The move is expected to provide critical debt relief and reduce Ghana’s overall debt by $5 billion.

According to Finance Minister Dr. Mohammed Amin Adam, the Eurobond exchange offer was designed with fairness in mind, reflecting agreements made with bondholder representatives.

The process involved two main investor options: the PAR Option with no nominal haircut but a lower interest rate, and the DISCO Option with a 37% nominal haircut but higher interest rates.

The minister hailed the achievement as a significant milestone in restructuring over 90% of Ghana’s eligible external debt.

The exchange will result in $4.3 billion in debt service savings during the International Monetary Fund (IMF) program, with the average interest rate on bonded debt decreasing from over 8% to less than 5%.

Key non-financial clauses in the agreement include the Loss Reinstatement Clause, protecting bondholders in case of future default, and the Information Sharing Clause, ensuring timely publication of debt figures.

Dr. Adam emphasized that these clauses reflect the government’s commitment to prudent debt management and transparency.

Ghana’s debt-to-GDP ratio is expected to decrease significantly, reaching 55% in 2028, in line with IMF targets.

The successful restructuring effort demonstrates Ghana’s credibility in international financial markets and sets the stage for improved fiscal management and long-term growth.

This achievement follows the completion of the Domestic Debt Exchange Programme and the Memorandum of Understanding with the Official Creditors Committee.

The government’s swift action has showcased its commitment to restoring financial stability and debt sustainability.

The development is seen as a major boost to Ghana’s economic recovery efforts, with the country poised to resume debt repayment in two weeks.

 

BY Daniel Bampoe