Ghana Bonds Fall After Warning Energy Debt Could Double by 2027
Ghana’s eurobonds fell on Tuesday and were among the worst performers in emerging markets, after Finance Minister Cassiel Ato Forson suggested that the country’s energy debt could double by 2027 unless action was taken.
Dollar bonds maturing in 2035 declined 1.1% to 73.3 cents on the dollar at 1:02 p.m. in London, the lowest in a month, according to data compiled by Bloomberg. Securities due 2030 lost 0.9% to 77.83 cents on the dollar.
Africa’s top gold producer needs “radical measures” to prevent debt in its energy sector from reaching $9 billion by 2027, Forson said Monday. Outstanding obligations were $4.5 billion at the end of 2024.
The minister was speaking at a national economic dialogue in Accra, the capital, organized by the administration of President John Mahama, who was elected in December by voters seeking an economic reboot after the country’s 2022 debt default and International Monetary Fund rescue.
Energy debt is being driven higher by distribution and collection losses at the state-run Electricity Company of Ghana Ltd., a lack of competition in the generation industry and tariffs that are set below the cost of production, Forson said. ECG is currently able to account for only 62% of the energy it buys to resell, he added.
Ghana, which completed a restructuring of 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 rework $2.7 billion in loans.
Mahama has vowed 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 has said the government will seek private-sector participation in energy distribution and revenue collection.
A decision would be taken within six months on whether this means full privatization or a concession model, where the successful bidder gets a specific number of years to run operations before reverting back to the state, he said.
