Ghana’s government plan to reorganize its domestic debt received acceptance from more than 80% of bondholders, a critical step in the country’s efforts to secure a $3 billion bailout from the International Monetary Fund.
The West African nation is restructuring 137.3 billion cedis ($11.3 billion) of domestic loans to overhaul almost all of its 575.5 billion cedis of debt. The authorities had targeted an 80% subscription rate for the domestic-debt restructuring to be deemed successful and the offer deadline was postponed five times to improve participation.
Press Release on the Domestic Debt Exchange Programme Participation pic.twitter.com/xjACiwgzEQ
— Ministry of Finance, Ghana (@MoF_Ghana) February 14, 2023
The government is grateful for the overwhelming participation of all bondholders. Your support and contributions have gotten your country much closer to securing the IMF programme.” the Finance Ministry said in a statement on Tuesday.
The cedi surged 3.1% to 11.8750 per dollar by 8:24 a.m. in the capital, Accra, heading for its biggest gain this year. Ghana’s 2026 Euroobonds climbed 0.9%, or 0.35 cents in the dollar, to 41.28 cents.
The government is engaging in separate talks with pension funds, which could further boost the number of institutions taking part in the process. Pension funds, which held about 5.5% of all domestic government bonds as of August, were exempted from the main offer after labour unions threatened to go on strike to preserve their members’ savings
Besides the reorganization of domestic loans, the government is also in talks to restructure bilateral and other external debt after suspending interest payments on $13 billion of Eurobonds. The West African nation targets reducing its liabilities from an estimated 105% of the gross domestic product in 2022 to 55% by 2028.
Read also; Ghana Extends Domestic Debt Exchange Deadline to Feb. 10 Due to Technical Issues.
