President Akufo-Addo with IMF Boss
President Akufo-Addo has indicated that the government was forced to take “a lot of unpleasant, but unavoidable measures” to bring stability and confidence back to the economy when the nation was faced with a very difficult situation.
According to him, the measures included tax measures that the government did not like, “but we knew we had to take in the knowledge that the medicine would be bitter, but temporary.”
Presenting the State of the Nation Address (SONA) in Parliament, the President said the nation was in the midst of negotiations with the International Monetary Fund (IMF).
“We were faced with a very difficult situation, and had to take a lot of unpleasant, but unavoidable measures, to bring stability and confidence back to the economy,” he stressed.
He admitted that the decision was not an easy one, considering the complex and diverse domestic debt landscape.
“We had to consider safeguarding the financial sector, preserving social and economic conditions, and protecting our domestic debt market,” he intimated.
He added, “A year on, I am happy to inform you, Mr. Speaker, that we have made significant progress.”
“We requested an unprecedented number of bondholders to participate in a voluntary exchange, and we were able to exchange successfully some GH¢203 billion worth of bonds,” he noted.
According to him, not only was the exchange successful, but it helped the country to secure, within five (5) months, the shortest possible time in recent debt restructuring history, a Staff Level Agreement to an Executive Board Agreement with the IMF.
“My gratitude goes to all financial sector players, organised labour, firms, regulatory institutions, and all individuals who made this painful exercise successful.
“Mr. Speaker, as you may recall, the Government successfully paid the first coupon of GH¢2,369.67 million on the new bonds on August 22, 2023,” he said.
President Akufo-Addo stated that at the time, that was the single biggest payout of domestic payments in a single day for Ghana.
“We then paid GH¢2,060.72 million for the last leg of the domestic debt exchange on September 5, 2023. A week ago, last Tuesday, on February 20, 2024, the second coupon of GH¢5,847.72 million was paid to domestic bondholders.
On the external debt side, he said the nation achieved a significant milestone by reaching an agreement with the public creditors, and expressed the government’s appreciation to the Republic of France and the People’s Republic of China, co-Chairs of the Official Creditors Committee, for their positive roles in this achievement.
“We have also intensified our engagement with our external bondholders on the principles of transparency, fair treatment, consistency with the IMF debt sustainability analysis, and good faith,” he noted.
The President said the government was “focused and committed to accelerating the process.”
By Ernest Kofi Adu, Parliament House