On Tuesday, Ghana’s eurobonds declined, ranking among the worst performers in emerging markets. This drop came after Finance Minister Cassiel Ato Forson warned that the nation’s energy debt could double by 2027 unless action was taken.
According to Bloomberg data, dollar bonds maturing in 2035 fell 1.1% to 73.3 cents on the dollar at 1:02 p.m. in London marking their lowest level in a month, while securities due in 2030 dropped 0.9% to 77.83 cents on the dollar.
Speaking on Monday, Forson stated that Africa’s top gold producer needs “radical measures” to prevent its energy sector debt from reaching $9 billion by 2027. He noted that outstanding obligations stood at $4.5 billion at the end of 2024.
The minister delivered his remarks at a national economic dialogue in Accra, the capital, organized by President John Mahama’s administration. Mahama was elected in December by voters seeking an economic reboot following the country’s 2022 debt default and subsequent International Monetary Fund rescue.
Forson explained that the rising energy debt is driven by distribution and collection losses at the state-run Electricity Company of Ghana Ltd., a lack of competition in the generation industry, and tariffs set below the cost of production. He further noted that ECG is currently able to account for only 62% of the energy it purchases for resale.
Ghana, which restructured most of its 737 billion cedis ($47.5 billion) of public debt in October—including eurobonds—is still in talks with 60 international banks to renegotiate $2.7 billion in loans. Meanwhile, Mahama has pledged to cut spending, refine the IMF’s $3 billion program, and restore investor confidence in the world’s second-biggest cocoa producer.
Minister of Energy John Abdulai Jinapor added that the government will seek private-sector participation in energy distribution and revenue collection. He mentioned that a decision will be reached within six months on whether to pursue full privatization or adopt a concession model, where the successful bidder runs operations for a specific number of years before handing them back to the state.
