The country’s Eurobonds and other external loans have been put on hold, according to the Ministry of Finance.
The Ministry claims that this is a temporary emergency step to revive the faltering national economy.
On Monday, December 19, the Ministry released a statement that read: “This suspension will not include the payments of our multilateral debt, new debts (whether multilateral or otherwise) contracted after 19th December 2022 or debts related to certain short term trade facilities.”
This comes after Ken Nana Yaw Ofori-Atta, the sector minister, launched a domestic debt swap program that is slated to launch at the end of December.
Domestic bondholders will be required to exchange their current securities for new ones as part of the program.
As on Thursday, December 1, existing domestic bonds will be swapped for a group of four new bonds with maturities in 2027, 2029, 2032, and 2037.
In light of this, all of those notes will have an annual coupon of 0% in 2023, 5% in 2024, and 10% from 2025 until maturity, with coupon payments made every other year.
Moreover, the country’s financial resources, in particular the Bank of Ghana’s foreign reserves, are “limited and need to be protected at this pivotal juncture,” according to the statement released on Monday, December 19.
The statement continued to iterate that:
“That is why we are announcing today a suspension of all debt service payments under certain categories of our external debt, pending an orderly restructuring of the affected obligations.”
Interestingly, an appraisal program for some of the specific debt-related projects with the greatest socioeconomic impact on Ghana, according to the statement, is currently underway.
Furthermore, the statement implied that some of these initiatives could need to be eliminated after the examination.
Meanwhile, according to the Ministry, there will be negotiations including all parties involved, especially external creditors, in order to have a “fair, transparent and thorough debt restructuring process in line with international best practices.”
Conclusion
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