Ghana to Swap Domestic Debt in Attempt to Regain Economic Stability

Ghana will launch a domestic debt exchange to help restore macroeconomic stability and end the country’s worst economic crisis in a generation.

According to its Finance Minister Ken Ofori-Atta, Ghana’s government had finished its debt sustainability analysis, but he did not provide any information on plans for foreign debt that are anxiously awaited by international creditors.

Under the domestic debt exchange, local bonds will be exchanged for new ones maturing in 2027, 2029, 2032 and 2037 and their annual coupon will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.

The government is in talks with the International Monetary Fund for a support programme to relieve its debt distress.

Your Friends Also Read:  Eskom to Shut Down Koeberg Nuclear Power Station for Revamping

The local cedi currency has plummeted more than 50% against the dollar in 2022, while the central bank hiked its main lending rate to 27% last Monday after inflation hit a 21-year peak in October.

Ofori-Atta said the government wanted to minimise the impact of the debt swap on small investors so would not apply the terms to Treasury bills or to holders of individual bonds. There will also be no haircut to the principal of the bonds, he said.

How the plan will impact individuals is still to be determined as many hold bonds through mutual and pension funds.

Ofori-Atta said the government would set up a financial stability fund with the support of development partners to help domestic financial institutions, including banks and pension funds, weather the swap.

Your Friends Also Read:  AfDB Appoints Malado Kaba as Director of Gender, Women and Civil Society 

“I say to you, nothing will be lost, nothing will be missing, and nothing will be broken. We will, together, recover all,” he said.


All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from News Central TV.

Contact: digital@newscentral.ng

Total
6
Shares

Leave a Reply

Previous Article
Mali's Choguel Maiga Reinstated as Prime Minister After Medical Leave (News Central TV)

Mali's Choguel Maiga Reinstated as Prime Minister After Medical Leave

Next Article
Gunmen Abduct Commissioner for Housing in Northcentral Nigeria (News Central TV)

Gunmen Abduct Commissioner for Housing in Northcentral Nigeria

Related Posts