The government is expected to make a debt service savings of GH¢61 billion in 2023 and beyond as part of the Domestic Debt Exchange Programme (DDEP), the Minister of Finance, Ken Ofori-Atta, has stated.
“Overall GH¢203 billion have been exchanged, which has resulted in debt service savings of GH¢61bn over 2023,” he stated during an investor presentation as part of the World Bank/International Monetary Fund (IMF) meeting in Marrakech in Morocco.
He said all the exchanges of domestic marketable debt planned as part of the DDEP had been completed and no further exchanges of domestic marketable debt was being considered.
“The success of the Comprehensive Domestic Debt Exchange Programme illustrates the commitment of the Ghanaian people to contribute to the government’s effort to restore debt sustainability,” he stated.
Mr Ofori-Atta said the DDEP and the fiscal efforts being pursued by the government had significantly contributed to restore debt sustainability, saying the “the remaining leg will be the contribution of External Creditors.”
The Finance Minister said the government exchanged a total of GH¢87.0 billion out of the GH¢96.0 billion treasury bonds, ESLA and Daakye bonds, with a participation rate of 90.7 per cent.
On the pension fund, Mr Ofori-Atta said government exchanged a total of GH¢29.6 billion out of a total eligible amount of GH¢31.0 billion with a participation rate of 95.3 per cent.
Mr Ofori-Atta said of the Cocoa bills and USD-denominated local bonds exchanges, $742 million was exchanged out of the eligible amount of $809 million with participation rate of 91.7 per cent.
The Finance Minister said the government had a 100 per cent exchange with the Bank of Ghana, exchanging a total of GH¢70.9 billion.
On the status of engagement with external creditors, Mr Ofori-Atta stated that government was expected to reach “agreement in principle with Official Creditor Committee expected by early November.”
Ghana applied to the G20 Common Framework for Debt Treatment on December 12, 2022 and an OCC formed by the end of April this year.
“Illustrative scenarios have been shared with the OCC and Paris Club secretariat. Official bilateral creditors are currently discussing, within the OCC, the broad parameters of the bilateral debt treatment,” Mr Ofori-Atta, stated.
With the engagement with the commercial creditors, the Minister of Finance said an agreement in principle with bondholders expected by the end of the year.
“Our objective is to reach an agreement with the Steering Committee of the bondholder’s group that respects Ghana’s need for debt relief in line with its debt sustainability analysis and the principle of comparability of treatment,” Mr Ofori-Atta stated.
Highlighting on the country’s macroeconomic performance, the Minister of Finance said Ghana’s macroeconomic environment was stabilising in line with the macroframework parameters.
He said Ghana’s growth was higher than expected, and inflation outlook was on a reducing trend and the exchange rate had stabilised over the last few months.
Ghana’s growth as of the second quarter this year, stood at 3.2 per cent and was projected to grow higher than the 1.5 per cent IMF projected for the country and inflation dropped to 38.1 per cent in September this year.
Ghana in 2022 sought IMF support for a three-year for $3-billion Extended Credit Facility for balance of payment support to restore macroeconomic stability.
Ghana signed on for IMF and programme in 2022 $3 billion balance of payment support to restore macroeconomic stability.
Ghana reached a staff-level agreement with the IMF on December 12, 2022 to enable the country seek the approval of the IMF Board for the programme and received the first tranche of $600 million and in the process to receive the second tranche of $600 million.
BY KINGSLEY ASARE
