As a result of the successful discussions on Ghana’s debt restructuring, President Akufo-Addo has said that many of the nation’s suspended projects will soon resume.
The President discussed the beneficial results of these discussions and their implications for Ghana’s growth during the credential presentation ceremony for nine recently appointed diplomats held at Jubilee House.
The President gave an overview on the conclusion of the three main debt restructuring initiatives: the debt restructuring for domestic bondholders, the debt restructuring for bilateral external debt, and the debt restructuring for domestic bondholders.
These initiatives have given much-needed financial relief and created the conditions for a revitalised emphasis on important development and infrastructure projects.
“These agreements have provided much-needed breathing space and put our domestic debt-to-GDP ratio on a clear downward trend,” President Akufo-Addo explained.
“The successful negotiations mean that bondholders will provide $4.4 billion in cash flow relief during the IMF Programme, in addition to the cancellation of $4.7 billion of the debt stock.”
In addition, the President emphasised the importance of the domestic debt restructuring, which saw a high participation rate of nearly 95%; coupon rates were lowered from 21% to 9% on average; and maturities were extended, which eased the burden of servicing the country’s near-term local debt, which had previously consumed over 40% of tax revenues.
This restructuring has put Ghana’s domestic debt-to-GDP ratio on track to reach 55% by the end of 2028. Ghana’s debts of $5.1 billion were restructured as a result of the deal with bilateral creditors, which was arranged by the Ghana Official Creditor Committee (OCC), which France and China co-chaired.
With the debt serviced and postponed until 2023–2026 at a lower interest rate, this agreement is anticipated to relieve cash flow by about $2.8 billion, or GH¢39 billion.
“The Agreement with our Bilateral Debt Holders will lead to a cash flow relief of around $2.8 billion or GH¢39 billion in debt service,” President Akufo-Addo stated. “This will enable us to resume and complete many projects that are vital for our nation’s progress.”
Through the successful negotiations, the IMF Executive Board was able to convene and approve Ghana’s Second Review of the Fund Programme, which led to an additional $360 million being disbursed in support of the programme. This additional funding will support Ghana’s ongoing efforts to revitalise its economy and expedite development initiatives.
The agreement with commercial bondholders is among the most significant achievements in the debt restructuring process. The government saved a substantial amount of money as a result of restructuring $13.1 billion in debt, including $4.7 billion, or GH¢65 billion, from the debt stock.
Furthermore, Ghana will experience additional financial assistance under the IMF Programme by saving $4.4 billion, or GH¢60 billion, in debt payments.
“The savings include the cancellation of $4.7 billion from the debt stock and $4.4 billion in cash flow relief during the IMF Programme,” President Akufo-Addo explained. “This comprises principal savings of $1.5 billion and interest savings of $2.9 billion.”
The President commended the Ministry of Finance, led by Hon. Mohammed Amin Adam, for their efforts in achieving these historic agreements. He emphasized the importance of these milestones in creating the financial space needed to resume and complete stalled projects across the country.
“These achievements are unprecedented in the history of country debt restructurings,” President Akufo-Addo stated. “The Minister for Finance and his team at the Ministry of Finance are to be warmly applauded for this historic achievement.”
Now that the government’s debt restructuring efforts have been successful, it can concentrate on reviving important development and infrastructure projects that have been put on hold because of budgetary limitations. The advancement and growth of Ghana depends on these initiatives, which include upgrades to the healthcare, education, transportation, and other key areas.
There is optimism and renewed hope for Ghana’s economic future following the President’s announcement. In addition to boosting national development initiatives, the reactivation of halted projects will raise living standards and generate jobs for Ghanaians.
The successful debt restructuring and the restart of projects that had been put on hold represent a major step forward in Ghana’s road to sustainable growth and prosperity as the country continues its economic recovery.