Full breakdown of $12bn Ghana saved from debt restructuring

Ghana has reached a major milestone in its debt restructuring efforts with the signing of a Memorandum of Understanding (MoU) with its Official Creditor Committee (OCC).
This agreement marks a significant step towards stabilizing the country’s financial situation and restoring long-term debt sustainability.

Massive $12bn debt relief secured
The agreement has resulted in total debt relief of approximately $12 billion.
The external component includes $2.8 billion in relief from official creditors, a $4.7 billion Eurobond cancellation, and $4.4 billion in cash flow relief during the duration of Ghana’s IMF-supported programme, summing up to $11.9 billion.
Additionally, Ghana’s domestic debt restructuring efforts have yielded GH₵61 billion in savings.

Minister of finance expresses gratitude
Finance Minister Cassiel Ato Forson, who announced the MoU, confirmed that all 25 Participating Creditor countries had signed the deal.
He extended gratitude to all OCC members, particularly China and France, which co-chaired the committee, for their commitment to assisting Ghana in resolving its debt crisis.
Dr. Forson also acknowledged Ghana’s bilateral and development partners for their unwavering support during the economic recovery process.
He emphasized that the MoU formalizes the debt treatment agreement with Official Creditors, allowing financial resources to be redirected towards economic development and recovery.

Implementation of the agreement
Following the signing of the MoU, the next step involves implementing the agreed terms through bilateral agreements with each OCC member. Ghana remains committed to expediting the process to ensure all agreements are finalized promptly.
Dr. Forson also noted that discussions with external commercial creditors are ongoing, aiming to finalize restructuring agreements that uphold Ghana’s need for debt relief while ensuring compliance with the comparability of treatment principle.

DDEP yields significant savings
On the domestic front, Ghana’s Debt Exchange Programme (DDEP) has seen a total of GH₵203 billion restructured, achieving an impressive participation rate of nearly 95%.
The restructuring has resulted in GH₵61 billion in savings over 2023.

Key outcomes of the domestic debt restructuring include a reduction in coupon rates from an average of 21% to 9% and an extension of maturities.
This move has significantly eased Ghana’s near-term debt service burden, which previously consumed over 40% of the country’s tax revenues.
As a result of these restructuring efforts, Ghana’s domestic debt-to-GDP ratio is projected to decline to 55% by the end of 2028, positioning the country on a more sustainable fiscal path.

A step towards economic stability
With this milestone agreement, Ghana is on course to restore debt sustainability and strengthen its economic recovery.
While challenges remain, the substantial debt relief secured provides the country with an opportunity to focus on growth-oriented policies and sustainable fiscal management in the years ahead.

GH¢189bn spent on debt servicing in 12 years
Ghana’s debt servicing between 2010 and 2022 amounted to GH¢189 billion, covering a 12-year period.
The annual breakdown highlights a steady rise in debt obligations: in 2010, GH¢1.44 billion was spent, increasing to GH¢45.69 billion by 2022.
The progression includes GH¢1.61 billion in 2011, GH¢2.44 billion in 2012, GH¢4.4 billion in 2013, GH¢7.08 billion in 2014, GH¢9.08 billion in 2015, and GH¢10.77 billion in 2016.
From 2017 onward, debt servicing climbed further, with GH¢13.57 billion in 2017, GH¢15.82 billion in 2018, GH¢19.77 billion in 2019, GH¢24.60 billion in 2020, and GH¢33.52 billion in 2021 before reaching GH¢45.69 billion in 2022.
A total of $520 million has been paid to Eurobond holders, including a $120 million consent fee offered as an incentive for bondholders to accept the new terms.
This fee provided $10 per $1,000 in principal to exiting bondholders.
Additionally, Ghana disbursed $320 million in coupon payments to Eurobond investors, which had been frozen since the debt service suspension.
Under the restructured agreement, regular coupon payments will resume in January 2025, with the next scheduled payment due in July 2025.
In February 2024, the government fully settled its first coupon payment of GH¢2.3 billion (GH¢2,369,667,190.18).
Later that month, GH¢5.8 billion was disbursed to domestic bondholders, marking the largest single-day coupon payment in Ghana’s history.
In August 2024, the government made its third coupon payment, amounting to GH¢6.1 billion.
By ELVIS DARKO, Accra