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Ghana: Domestic debt swap ended with 85% participation – Central bank

Published

1 year ago

February 14, 2023

The ministry of finance in Ghana has revealed that around 85% of eligible bondholders had registered for its domestic debt exchange programme.

The revelation comes after five extensions of the scheme’s deadline, as the country pushes to secure its targeted 80% subscription rate. Holdouts persisted despite several revisions to the initial debt-swap offer.

The ministry said on Tuesday that 84.91% of 97.7 billion cedis of “eligible” domestic bonds were tendered and accepted.

The government had initially earmarked 126.97 billion cedis ($10.67 billion) of domestic bonds for restructuring, but agreed to exempt pension funds in late December after labour unions threatened a general strike.

“The government is … grateful for the overwhelming participation of all bondholders. Your support and contributions have gotten your country much closer to securing the IMF programme,” it said in a previous statement issued in the early hours of Tuesday.

According to the central bank, external debt was $29.2 billion at the end of November, and a third of Ghana’s 575.7 billion cedis ($48.4 billion) debt was domestic.

Sources have revealed that bilateral lenders are discussing the formation of an official creditor committee, a first step needed to engage in debt relief talks.

Ghana launched a debt swap plan in December as part of attempts to address a spiraling economic crisis, but it has struggled to convince bondholders to register, in part due to a lack of clarity over its terms and concerns about profitability.

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Nigeria wants $2.25 billion World Bank loan

Published

12 hours ago

April 23, 2024

Ifeoluwa Dada

Nigeria’s Finance Minister, Wale Edun, has revealed that the country is seeking up to $2.25 billion in World Bank loans and expects the bank’s board to approve the request in June.

The move was announced in a statement following the International Monetary Fund/World Bank spring meetings in Washington, D.C as the country also aims to issue diaspora bonds later this year to attract much-need foreign exchange into the country.

The World Bank loans would include $1.5 billion for development policy and $750 million for program-for-results, the statement said. It also said that the bank would meet in June to decide whether to approve the plan in its entirety.

The multilateral body is yet to comment on the revelation at press time.

Nigeria one of Africa’s biggest oil producers has struggled lately mainly over industrial-scale crude oil theft, and troubles getting foreign currency, which caused its naira currency to drop to all-time lows against the U.S. dollar. It has since recovered, though.

Already, the country is on record levels of debt, high unemployment, and large amounts of money from the central bank. However, Edun has insisted that the government had cut the money it borrowed from the central bank in half.

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Ghana’s finance minister anticipates debt restructuring MoU with lenders

Published

1 day ago

April 22, 2024

Ifeoluwa Dada

Ghana’s Finance Minister has announced that the country’s two main creditors will send him a draft Memorandum of Understanding (MoU) on a restructuring deal in May, signifying a major progress in the country’s debt reform.

Once the MoU is signed, it will make public the deal that was made in January to restructure $5.4 billion in loans with its official creditors, such as China and France.

The restructuring is a big step toward Ghana getting rid of its debt as it works to get out of the worst economic crisis in a generation. It should also allow the country to get more money from its $3 billion IMF program.

Mohammed Amin Adam said he was sure the International Monetary Fund (IMF) and the World Bank would work together at the Spring Meetings in Washington, D.C. In June, the Monetary Fund’s executive board will agree to review its staff-level deal.

From 2023 to 2028, Ghana’s national debt to gross domestic product level was supposed to go down by 15%. This guess says that the number will have gone down every year for six years, ending at 69.96% in 2028.

Ghana didn’t pay back most of its foreign loans in December 2022 because it became too expensive to do so. But now it needs to work out a deal with private holders of about $13 billion in foreign bonds. It has also changed most of its domestic debt.