Ghana’s Finance Minister, Dr. Mohammed Amin Adam, announced the successful completion of the country’s Eurobond debt exchange program, a major step in the nation’s ongoing efforts to restructure its external debt and restore economic stability.
Speaking at a press conference at the Ministry of Finance, Dr. Adam emphasized that Ghana has achieved a significant milestone, securing over 98 percent consent from bondholders to restructure $13 billion in Eurobonds.
This debt exchange marks a crucial phase in Ghana’s broader debt restructuring efforts, which began in December 2022.
The restructuring process is part of the country’s compliance with the International Monetary Fund’s (IMF) Debt Sustainability Thresholds, aimed at reducing Ghana’s debt burden while fostering long-term economic growth.
Key Outcomes of the Debt Exchange
The Eurobond debt restructuring offered bondholders two options:
1. PAR Option: No nominal haircut, lower interest rate (1.5%), and longer tenors, maturing in 2037.
2. DISCO Option: A 37 percent nominal haircut, higher interest rates (5-6%), and shorter tenors, maturing between 2029 and 2035.
The Finance Minister noted that both options included compensation for interest payment arrears from 2023, provided through Post-Default Interest (PDI) Notes.
With a 98 percent participation rate from bondholders, the outcome far surpassed the minimum required threshold of 65 percent, underscoring strong support for the government’s efforts to manage its external debt.
Economic Impact and Debt Relief
This successful restructuring reduces Ghana’s debt stock by $5 billion, with an additional $4.3 billion in debt service savings over the duration of the IMF program.
The average interest rate on bonded debt has also decreased from over 8 percent to below 5 percent, easing the burden on the nation’s finances.
Moreover, the completion of this debt exchange resolves Ghana’s default on international bonds and restores normal financial relationships with global markets and credit rating agencies.
This development also marks the restructuring of over 90 percent of Ghana’s eligible external debt, a significant achievement in the country’s economic recovery journey.
Commitment to Transparency and Debt Management
In addition to the financial benefits, Dr. Adam highlighted the inclusion of non-financial clauses in the debt agreement, which are becoming standard in international markets.
These include a Loss Reinstatement Clause that protects bondholders in the event of future defaults, and an Information Sharing Clause to ensure timely reporting of debt figures.
The Most Favoured Creditor Clause also ensures that no creditor receives preferential treatment over others.
The Minister concluded by expressing gratitude to all stakeholders, including Eurobond holders, the Official Creditors Committee, and Ghana’s financial and legal advisors, for their cooperation throughout the complex restructuring process.
He reaffirmed the government’s commitment to building on this success to drive sustainable economic growth and fiscal responsibility in the coming years.
With this milestone, Ghana can now shift its focus from debt restructuring to accelerating economic development, positioning the country for long-term financial stability and growth.