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Ghana agrees $1.36 billion local debt restructuring with banks

Published

11 months ago

June 28, 2023

Ghana has agreed to a deal to restructure its local debt with banks, a total of 15 billion Ghana Cedis ($1.36 billion) of locally issued US dollar bonds and cocoa bills.

Domestic dollar bonds, cocoa bills, pension funds, and debt to the central bank are included in the debt to satisfy the short-term liquidity requirements of the nation’s cocoa regulator, Cocobod.

The government and the lenders have agreed to convert 6.9 billion Ghana Cedis worth of domestic US dollar bonds into two-term loans with new lower rates, according to sources in the finance ministry and a local bank that holds some of the bonds.

Last week, Finance Minister, Ken Ofori-Atta hinted that his country intends to complete its debt restructuring deals soon and the process of getting a memorandum of understanding (MoU) with the creditors was on.

The sources at the ministry confirmed that the memorandum of understanding for the domestic US dollar bonds was with the Securities and Exchange Commission for approval. “Our target is to conclude it by the end of June.”

“They (the banks) understand that they are better off getting a restructuring because we may not be able to pay the coupon,” the other finance ministry source said.

Even though some banks are hanging out for 13%, another 8.1 billion Ghana Cedis worth of cocoa bills will be transformed into a new bond with a 12% return, according to the banking source.

To be able to fulfill an International Monetary Fund (IMF) deadline and concentrate efforts on negotiations with foreign creditors, Ghana is hoping for new terms for the restructuring of its domestic debt after the first phase of its domestic debt exchange ended in February with 85% of eligible bondholders participating.

Ghana has defaulted on both its local and international debt with its creditors, mainly China, the World Bank, and the International Monetary Fund, and has in recent years been occupied with restructuring its debt. Elsewhere in southern Africa, Zambia also recently agreed to debt restructuring with its international creditors.

Related Topics:Featured Ghana Ken Ofori-Atta

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Nigeria’s inflation hits 28-year high of 33.69% in April

Published

53 mins ago

May 16, 2024

Ifeoluwa Dada

Nigeria’s consumer inflation reached a 28-year high of 33.69% in April, up from 33.20% in March, according to statistics agency figures released on Wednesday.

President Bola Tinubu’s administration has slashed petrol and energy subsidies and devalued the local naira currency twice.

To manage pricing pressures, the central bank has hiked interest rates twice this year, including the highest hike in almost 17 years. The central bank governor has stated that rates will remain high for as long as necessary to reduce inflation. The bank will host another rate-setting meeting next week.

When compared to the previous year, the inflation rate in April 2024 was 11.47 percentage points more than in April 2023, when it stood at 22.22 percent. This implies that the headline inflation rate has increased dramatically during the last year.

According to the National Bureau of Statistics, food and nonalcoholic beverages remained the largest contributor to inflation in April. Food inflation, which accounts for most of the inflation basket, rose to 40.53% yearly from 40.01% in March.

Price pressures have left millions of Nigerians facing the biggest cost-of-living crisis in decades, as they fight to satisfy their most basic necessities.

Tinubu has offered a 35% salary increase for state personnel to alleviate pressure on government workers. To assist disadvantaged households, his government has resumed a direct cash transfer program and provided at least 42,000 tons of grains such as corn and millet.

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Uganda discusses power line to South Sudan with China’s Sinohydro

Published

23 hours ago

May 15, 2024

Ifeoluwa Dada

According to the president’s office, Uganda is in negotiations with Sinohydro Corporation Limited of China to build a $180 million power transmission line that would enable Uganda to export electricity to South Sudan, which is severely short on energy.

Ugandan President Yoweri Museveni received a group led by Vice President of Sinohydro Corporation Yang Yi Xin on Monday as part of the negotiations, according to a late-morning statement from Museveni’s office.

The project, according to the statement, will entail building a new substation and expanding two existing ones in addition to building a 138-kilometre high-voltage transmission line to provide power to South Sudan.

“We are very much willing to help develop this project with the required finance if needed,” Xin was quoted as telling the president.

The statement stated that Museveni endorsed Sinohydro’s proposal to carry out the project. Uganda and South Sudan inked a power sales deal in June of last year, enabling Uganda to sell electricity to South Sudan.

To enable Uganda to export electricity to South Sudan, the two nations inked a power sales deal in June of last year. The Chinese firm is completing a $1.5 billion, 600-megawatt hydropower project on the River Nile in Northern Uganda that is meant to be the source for electricity exports to South Sudan.