Ghana Extends Deadline for Its Debt Exchange Program for Third Time
Kenneth Ofori-Atta (R), Ghana’s Minister of Finance, exchange signed documents for the Ghana Solar Photovoltaic-Based Net Metering Project in Accra, Ghana, on May 25, 2022 with Dr Akinwuni A. Adesina (L), president of the African Development Bank Group.
InternationalIndiaAfricaMuhammad OsmanGhana is facing its worst economic crisis in a generation, brought about by rampant debt. In October 2022, the Bank of Ghana revealed that the West African country’s public debt was 467.4 billion Ghanaian cedis ($37.4 billion), of which 42% was domestic debt, with interest payments consuming between 70% and 100% of government revenues.The government of Ghana has extended the deadline of the program to restructure its internal debt to January 31, marking the third time it has done so since the launch of the program in December 2022.Ghana’s Finance Minister Ken Ofori-Atta said on Monday that the move was taken in order to allow the government to build more consensus while they further engage with stakeholders’ institutions and individual investors, who were recently invited to join the debt exchange program.“Building consensus is key to a successful economic recovery for Ghana,” Ofori-Atta said in a statement on social media.The deadline for Ghana’s domestic debt exchange program was initially scheduled for December 19, 2022, before it was moved to the end of the month. Later, the government extended the deadline a second time, to January 16.This development could mean the delay of Ghana’s plan to receive a $3 billion bailout from the International Monetary Fund (IMF) as the international body has indicated its loan approval is pending the introduction of a comprehensive Ghana debt restructuring program.In early December 2022, an IMF delegation visited Accra to agree on a $3 billion loan deal, in response to a request from the Ghanaian government. The IMF staff-level agreement with Accra suggested that the latter undergo comprehensive debt restructuring, as a condition for offering the rescue package.Over the last year, Ghana has been struggling with its worst economic crisis in a generation, fomented by debt. However, the West African country’s government is making efforts to restructure the country’s general debt, which is valued at 467.4 billion cedis ($37.4 billion), by putting forward a plan to swap about 137.3 billion Ghana cedis ($10.5 billion) in local bonds for new ones, while seeking help from the IMF to restructure external debt.
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