Dr. Mohammed Amin Adam, Minister for Finance, says Ghana’s debt restructuring sets new standards on the bond market for creditors and debts.
He said Ghana’s debt exchange entailed some non-financial clauses, which are becoming the new market standard on the bond market.
The minister said this at a press conference to announce the completion of the exchange offer and consent solicitation for Eurobond debt restructuring.
The new standards set by the country included key non-financial clauses, notably the Loss Reinstatement Clause, the Information Sharing Clause, and the most preferred credit clause.
“The Loss Reinstatement Clause, for instance, protects bondholders by reinstating their nominal haircut in case of a new default within a specified timeframe. This ensures prudent debt management and prevents future defaults. Information Sharing Clause also ensures timely publication of debt figures, promoting debt transparency and accountability.
In the Most Favoured Creditor Clause, Ghana cannot treat other commercial creditors more favourably than bondholders, upholding inter-creditor equity,” he said.
The finance minister stressed that these clauses demonstrated Ghana’s dedication to responsible debt management and transparency, aligning with international best practices.
Dr. Amin said considering a successful completion of the exchange offer, Ghana stood to achieve significant macro-economic stability and economic growth.
He said Without any adjustment, Ghana’s debt to GDP level (in present value terms) would have reached 109 percent in 2028, noting that fiscal adjustment efforts will contribute to bringing down to 81 percent in 2028.
The DDEP, he asserted, will bring Ghana’s debt down by 10 percentage points to 71 percent.
Dr. Amin also stated Ghana’s agreement with the OCC will reduce Ghana’s debt further by 6 percentage points.
He said the deal completed with the Eurobond bondholders will bring the debt to GDP in present value terms to 55 percent in 2028, in line with the IMF target of 10 percentage points contribution.
“The completion of the Eurobond debt exchange will immediately reduce our debt stock by the full extent of the US$5 billion haircut on principal and gains on interest payments for the period as a result of the debt restructuring,“ he said.
GNA
CA/
Oct. 4, 2024
