The government has resumed servicing its Eurobond debts following the successful completion of a debt exchange program with bondholders last week.
According to the report, the total payment to Eurobond holders amounts to $520 million.
This figure includes a significant $120 million consent fee designed to incentivize bondholders to participate in the exchange under specific conditions.
Market analysts have characterized this payment as a strategic consideration aimed at encouraging participation in the Debt Exchange Programme.
The consent fee comprises $10 per $1,000 of the principal amount for the bonds being exchanged. Additionally, the government has disbursed approximately $320 million to investors, representing overdue coupon payments that were previously frozen due to a debt service suspension initiated in 2022.
As part of the restructuring agreement, these payments were mandated to resume once the debt deal was finalized.Looking ahead, the government plans to restart regular coupon payments to bondholders in January 2025, with another payment scheduled for July 2025.
This initial timeline outlines the expected repayment schedule for the coming year.
The government is optimistic about its capacity to manage these payments, asserting that the Bank of Ghana has fortified its dollar reserves, which are crucial for servicing the debts.
As of August 2024, the Bank’s Economic and Financial Data indicates that the country’s international reserves stand at $7.5 billion, equivalent to 3.4 months of import coverage.
The recent conclusion of the Eurobond Debt Exchange Programme marks a pivotal moment, with nearly 100 per cent of bondholders opting to trade their old bonds for new ones.
This successful restructuring of the $13 billion debt owed to Eurobond investors allows the government to resume its debt servicing obligations.In contrast, the repayment schedule for bilateral creditors is projected to commence in 2026.
Finance Minister Dr. Mohammed Amin Adam has revealed that the ministry has presented a proposal to the cabinet outlining potential investment strategies for establishing a sinking fund.
This fund aims to alleviate the fiscal burden associated with repayments when they begin in 2026, positioning the government to manage its financial commitments more effectively in the future.
Story by : Mercy Addai Turkson
