Professor Peter Quartey, Director of the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, has welcomed the completion of debt restructuring operations, stating that it has brought much-needed certainty to the market.
This development, he noted, is what investors had been eagerly awaiting for years.
The successful conclusion of three major debt restructuring operations – domestic debt restructuring, external bilateral debt restructuring, and commercial bondholders debt restructuring – was announced by Finance Minister Dr. Mohammed Amin Adam.
The negotiations with official creditors resulted in a restructuring of $5.1 billion, with expected savings of $2 billion.
President Nana Addo Dankwa Akufo-Addo hailed the successful negotiations, indicating that they have provided significant financial relief and paved the way for a renewed focus on critical infrastructure and development projects.
The agreements, he explained, have set the domestic debt-to-GDP ratio on a downward trend and provided cash flow relief of approximately $2.8 billion.
The debt restructuring process has been hailed as a historic achievement, with the commercial bondholders’ agreement resulting in significant savings for the government.
The successful negotiations have also enabled the IMF’s Executive Board to approve Ghana’s Second Review of the Fund Programme, resulting in a further disbursement of $360 million.
With the debt restructuring initiatives in place, the government is now well-positioned to focus on revitalizing critical infrastructure and development projects that have been stalled due to financial constraints.
This development has been met with optimism and renewed hope for Ghana’s economic future.
The successful debt restructuring operations have far-reaching implications for Ghana’s economy.
The domestic debt restructuring achieved a high participation rate of almost 95%, with coupon rates reduced from 21% to 9% on average and maturities extended.
This restructuring has set the domestic debt-to-GDP ratio on a path to reach 55% by the end of 2028.
The external bilateral debt restructuring has also been a crucial milestone in Ghana’s economic recovery efforts.
The agreement with bilateral creditors, coordinated through the Ghana Official Creditor Committee (OCC) and co-chaired by France and China, resulted in the restructuring of $5.1 billion of Ghana’s debts.
The commercial bondholders’ agreement resulted in significant savings for the government, including the cancellation of $4.7 billion from the debt stock and $4.4 billion in cash flow relief during the IMF Programme.
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.
The successful debt restructuring initiatives have paved the way for Ghana’s economic recovery and growth.
The government’s focus on revitalizing critical infrastructure and development projects is expected to boost the country’s development efforts, create jobs, and improve the quality of life for Ghanaians.
