Mid-Year Budget Review: Gov’t seeks external restructuring agreement with creditors by year-end

Mid-Year Budget Review: Gov’t seeks external restructuring agreement with creditors by year-end

During the delivery of the 2023 Mid-Year Budget Review on Monday, Ghana’s Finance Minister, Ken Ofori-Atta, revealed that the government has initiated vital negotiations with its commercial creditors, specifically the Eurobond investors.

According to him, to facilitate the discussions, two bondholder groups have been formed, encompassing domestic and regional bondholders, as well as international bondholders. With a commitment to transparency, the government has already proactively shared relevant data and scenarios to commence the dialogue.

The core objective of these negotiations, the Finance Minister noted, is the restructuring of the Eurobonds, as the government seeks a sustainable resolution to address its external debt obligations that amount to over $29bn.

Mr Ofori-Atta expressed confidence in receiving counteroffers from bondholders in the short-term as Government aims to reach a mutual agreement by year-end (2023).

Successfully restructuring the Eurobonds is paramount for Ghana’s fiscal management and its efforts to bolster investor confidence. By actively engaging with bondholders and providing essential information, the government is taking proactive measures to find pragmatic solutions for addressing fiscal challenges.

Throughout the negotiations, Ghana remains resolute in achieving an equitable agreement that benefits all stakeholders. The Finance Minister’s remarks underscore the government’s unwavering commitment to fiscal prudence and the responsible management of its debt portfolio.

Meanwhile, Ghana’s public debt increased by a fifth in just four months, driven partly by the inclusion of short-term loans from the central bank to the state.

Public debt, which excludes state-owned enterprises obligations, rose to GHS 569.3 billion ($49.7 billion) at the end of April, the Bank of Ghana said on its website. The figure was adjusted to include the central bank’s overdraft to the government, which was securitized in December 2022.