The Ghanaian government is set to make its third coupon payment of GH₵6.1 billion in August 2024. This follows two previous payments, with the second payment of approximately GH₵5.9 billion made in February 2024, as outlined in the Mid-Year Budget Review.
Ghana defaulted on most of its bonds in December 2022, when it announced a debt restructuring programme. This announcement led to a series of downgrades to junk status by the top three rating agencies: S&P Global Ratings, Moody’s, and Fitch Group. The debt restructuring signaled the country’s financial struggles, leading to a collapse of the secondary bonds market, which had previously been vibrant and attracted many foreign investors.
However, after successfully restructuring Ghana’s domestic debt amid investor protests, the government has resumed payments on the new and restructured bonds. The timely payments of these coupons are expected to improve investor confidence in the domestic market and bolster the overall economy. Nonetheless, it will take considerable time for the secondary bond market to return to its pre-debt restructuring level of buoyancy.
Market analysts suggest that the government must also resume coupon payments to external creditors to signal a return to a semblance of the former market stability.
On June 24, 2024, the government reached an agreement in principle with Eurobond holders’ committees to restructure approximately $13.1 billion of outstanding Eurobonds. This agreement includes reducing the nominal value of the outstanding Eurobonds by $4.7 billion and providing debt service relief of about $4.4 billion during the program period. Earlier, on June 11, 2024, the government and the Official Creditors Committee reached an agreement on a Memorandum of Understanding covering the restructuring of about $5.1 billion of official bilateral debt.
The debt restructuring aims to reduce the present value of Ghana’s public debt to 55 percent by 2028, as outlined in the IMF-supported program. The government says remains committed to engaging in good faith negotiations with other commercial external creditors, including private banks and suppliers or contractors that have provided commercial loan facilities.
