The government will officially launch an exchange offer in the coming days, for the country’s bondholders, as part of efforts to complete the external debt restructuring exercise, Finance Minister, Dr Mohammed Amin Adam, has stated.
He said the exchange offer reflected the terms agreed in principle with bondholders on June 24, including important concessions from the bondholders, ensuring a fair burden sharing between the domestic, official, and commercial external creditors.
Speaking at the monthly press briefing in Accra last Thursday, Dr Adam stated that the exchange would be open for 21 days.
The programme, which formed part of the monthly press briefing on the economy, was to present a highlight of the major economic strides the government has achieved in the month of August.
The Finance Minister entreated the country’s bondholders to participate in the exercise, saying, “We count on the full support of our bondholder community, both abroad and in Ghana, to reach high participation levels.”
Dr Adam point out that it was envisaged that all the outstanding bonds would be exchanged for our new bonds where investors could choose between two options: a Par option – with no nominal haircut but low interest rates, and a Disco option with a 37 per cent nominal haircut but higher interest rates.
“The debt exchange will allow Ghana to save $4.4 billion in debt service and a cancellation of $4.7 billion over the course of the International Monetary Fund (IMF) programme, and contribute to reducing our debt to Gross Domestic Production (GDP) ratio to 55 per cent by 2028 to achieve our debt target,” the Finance Minister explained.
He expressed gratitude to the bondholder community for their support and hoped that the successful exchange would pave the way for Ghana to access the international capital market
Dr Adam further said that the government had taken steps to ensure the completion of strategic infrastructure that had been impacted by the debt restructuring exercise.
“Our efforts have enabled us to complete the Prempeh (I) International Airport, Afari Military Hospital in Kumasi as well as the Yakubu Tali International Airport in Tamale,” he stated, adding that, “This week, the President cut the sod for the Accra-Tema Motorway redevelopment project. Two (2) days ago, I also visited the Kasoa-Winneba Road, which is being fully funded by the national Budget. Like many of you who ply that road, I am very impressed with the progress of work on this critical road.”
Moreover, Dr Adam noted that the government was working with its partners to implement the Economic Roads Improvement Programme, which includes the Accra-Kumasi Road, emphasising that, “This is part of our broader strategy to open up the country for trade, tourism and regional integration.”
Dr Adam, providing an update on Ghana’s public debt developments, highlighted that as of July 31, 2024, Ghana’s provisional nominal central government debt stood at GH¢761.1 billion, equivalent to $51.1 billion.
That, he said, represented a nominal increase from the previous amount of GH¢587.7 billion, equivalent to $53.5 billion.
“The increase in Cedi terms and decrease in dollar terms is attributed to a combination of factors, including cedi depreciation, disbursements from multilateral institutions, and domestic financing of the budget,” Dr Adam stated.
Bondholders urged to participate in exchange offer exercise
The government will officially launch an exchange offer in the coming days, for the country’s bondholders, as part of efforts to complete the external debt restructuring exercise, Finance Minister, Dr Mohammed Amin Adam, has stated.
He said the exchange offer reflected the terms agreed in principle with bondholders on June 24, including important concessions from the bondholders, ensuring a fair burden sharing between the domestic, official, and commercial external creditors.
Speaking at the monthly press briefing in Accra last Thursday, Dr Adam stated that the exchange would be open for 21 days.
The programme, which formed part of the monthly press briefing on the economy, was to present a highlight of the major economic strides the government has achieved in the month of August.
The Finance Minister entreated the country’s bondholders to participate in the exercise, saying, “We count on the full support of our bondholder community, both abroad and in Ghana, to reach high participation levels.”
Dr Adam point out that it was envisaged that all the outstanding bonds would be exchanged for our new bonds where investors could choose between two options: a Par option – with no nominal haircut but low interest rates, and a Disco option with a 37 per cent nominal haircut but higher interest rates.
“The debt exchange will allow Ghana to save $4.4 billion in debt service and a cancellation of $4.7 billion over the course of the International Monetary Fund (IMF) programme, and contribute to reducing our debt to Gross Domestic Production (GDP) ratio to 55 per cent by 2028 to achieve our debt target,” the Finance Minister explained.
He expressed gratitude to the bondholder community for their support and hoped that the successful exchange would pave the way for Ghana to access the international capital market
Dr Adam further said that the government had taken steps to ensure the completion of strategic infrastructure that had been impacted by the debt restructuring exercise.
“Our efforts have enabled us to complete the Prempeh (I) International Airport, Afari Military Hospital in Kumasi as well as the Yakubu Tali International Airport in Tamale,” he stated, adding that, “This week, the President cut the sod for the Accra-Tema Motorway redevelopment project. Two (2) days ago, I also visited the Kasoa-Winneba Road, which is being fully funded by the national Budget. Like many of you who ply that road, I am very impressed with the progress of work on this critical road.”
Moreover, Dr Adam noted that the government was working with its partners to implement the Economic Roads Improvement Programme, which includes the Accra-Kumasi Road, emphasising that, “This is part of our broader strategy to open up the country for trade, tourism and regional integration.”
Dr Adam, providing an update on Ghana’s public debt developments, highlighted that as of July 31, 2024, Ghana’s provisional nominal central government debt stood at GH¢761.1 billion, equivalent to $51.1 billion.
That, he said, represented a nominal increase from the previous amount of GH¢587.7 billion, equivalent to $53.5 billion.
“The increase in Cedi terms and decrease in dollar terms is attributed to a combination of factors, including cedi depreciation, disbursements from multilateral institutions, and domestic financing of the budget,” Dr Adam stated.
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