Ghana is set to exchange US$13 billion in Eurobonds for new bonds in the coming weeks.
This announcement was made by the Minister for Finance,Dr. Mohammed Amin Adam, during the monthly press briefing on the economy and the joint Government of Ghana-IMF press conference, held on October 4, 2024.
According to Dr. Adam, the Eurobond exchange will result in a 37 perecnt reduction in the country’s external debt, which translates to approximately US$5 billion in debt relief.
Additionally, the programme will provide Debt Service Relief amounting to US$4.3 billion between 2023 and 2026, alleviating the government’s fiscal pressure during this critical period.
Dr. Adam highlighted the importance of this development, saying, “As a result of Ghana’s successful Eurobond debt exchange programme, the country will exchange about US$13 billion in Eurobonds for new bonds in the coming weeks, resulting in a debt reduction of 37 percent or US$5 billion, and Debt Service Relief of US$4.3 billion between 2023 and 2026.”
One of the key outcomes of the exchange will be a significant reduction in interest rates. Ghana previously paid over 8 percent in interest on its Eurobond debt, but after restructuring, the interest rates will drop to below 5 percent, easing the financial burden on the country.
The Finance Minister stressed that Ghana has now successfully restructured over 90 percent of its eligible external debt, a critical milestone in the country’s path toward macroeconomic stability. “In essence, Ghana has now restructured over 90 percent of its eligible external debt, marking a significant milestone in its economic recovery,” he said.
This achievement follows the successful completion of Ghana’s Domestic Debt Exchange Programme (DDEP) in 2023, which restructured around GHS 203 billion of domestic debt, along with the agreement to restructure US$5.1 billion in bilateral official debt with the Official Creditors Committee (OCC).
Dr. Adam praised the support from bondholders and development partners, noting that the Eurobond debt exchange received more than 98 percent consent from bondholders, surpassing the target of 65 percent.
In the coming months, the IMF Executive Board is expected to meet in December 2024 to review Ghana’s progress and approve the release of the next US$360 million tranche, which will bring the total disbursement under the programme to US$1.92 billion.
