Economy
Ofori-Atta: Resisting debt exchange inimical to economic recovery

Minister of Finance, Mr Ken Ofori-Atta has cautioned that “a destabilized macro-economic environment is the greatest enemy to the value of workers’ pensions,” and called on the Trades Union Congress (TUC) among other groups to support efforts by government to restore macroeconomic stability and promote robust and inclusive growth.
The Minister, during a press conference organised jointly by the Ministry of Finance and the International Monetary Fund (IMF) in Accra admitted it was not surprising to learn of the feedback from labour on the launch of the domestic debt exchange programme, as part of efforts to restructure the country’s debt.
The TUC on Monday issued a statement giving a one-week ultimatum for government to exempt pension funds from the Debt Exchange Programme.
The Union said it had come to a firm conclusion that the debt exchange programme will negatively impact pension funds of its members, and consequently the retirement income security of workers.
Secretary-General of TUC, Dr. Yaw Baah was quoted in the statement as saying that the TUC and its affiliate National Unions had decided that “the pension funds of their members will not be part of the Domestic Debt Exchange Programme.”
He asked workers to get ready to participate fully in any industrial action to protect pension funds, adding: “workers will no longer bear the consequences of any IMF-inspired policies. Government is responsible for all the consequences of its decisions.”
Other identifiable groups such as the trade associations, individual pensioners, research institutions, the academia and the public at large have expressed some uneasiness about the fencing of their investments.
But Finance Minister gave the assurance that stability would soon be restored, urging calm on the labour front and rallying all to support the government steer the country into stable waters.
“We are confident as a resilient people, and we shall rally to support this great enterprise, to restore macroeconomic stability and promote robust and inclusive growth. The world is looking at us, and I know we can do it,” Mr Ofori-Atta stated.
Mr Ofori-Atta observed that already, the economy was responding positively to the news of government and the IMF reaching a staff level agreement and “we are eager to leverage this momentum to the very moment when the IMF Executive Board approves the Programme request.”
“We are already seeing significant improvements in the exchange rate with the Ghana cedi recovering against major currencies, the Finance Minister added.
The Domestic Debt operation involves an exchange for new Ghana bonds with coupons of a longer average maturity. Existing domestic bonds as of December 1, 2022 will no longer be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.
The annual coupon on all these new bonds according to the MoF, will be set at zero percent in 2023, five percent in 2024, and 10 percent in 2025 until maturity. Coupon payments will be semi-annual, with the programme not affecting individual bondholders.
IMF Mission Chief to Ghana Stephane Roudet reposed confidence in government’s ability to restore macro-economic stability stressing the importance of a successful debt restructuring exercise for the approval of the IMF Board of a support programme for Ghana.
He reiterated the point that government had committed to a wide-ranging economic reform programme, “which builds on the government’s Post-COVID-19 Programme for Economic Growth and tackles the deep challenges facing the country.”
The COVID-19 pandemic, rising global food prices, rising crude oil and energy prices; and the Russia-Ukraine war adversely affected Ghana’s macroeconomy, with spillovers to the financial sector.
The combination of adverse external shocks had exposed Ghana to a surge in inflation, a large exchange rate depreciation and stress on the financing of the budget, which taken together have put our public debt on an unsustainable path.
Debt servicing is now absorbing more than half of total government revenues and almost 70% of tax revenues, while total public debt stock, including that of State-Owned Enterprises and all, exceeds 100% of GDP.
Debt Sustainability Analysis (DSA) had demonstrated that Ghana’s public debt was unsustainable, and that the government may not be able to fully service its debt down the road if no action is taken.
The DSA had demonstrated that Ghana is faced with a significant financing gap over the coming years revealing that public debt is unsustainable.
To address the ongoing economic crisis, the government had already requested financial support from the IMF.
GH₵137bn domestic debt
In the Debt Exchange programme, government is targeting GH₵137 billion in domestic notes and bonds from domestic debt holders.
4 New Ghana bonds
Domestic debt operation involves an exchange for new Ghana bonds with a coupon that steps up to 10% as soon as 2025 (with a first interest payment in 2024) and longer average maturity.
Maturing dates for the new bonds
Existing domestic bonds as of December 1 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.
Predetermined allocation ratios
Predetermined allocation ratios are 17% for the short bonds, 17% for the intermediate bond, 25% for the medium-term bond and 41% for the long-term bond.
Annual coupon rates
The annual coupon rates on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity. Coupon payments will be semi-annual.
Eligible holders, who deliver valid offers at or prior to the expiration date that are accepted by the country, will receive at the settlement date in exchange for their eligible bonds accepted, the same aggregate principal amount distributed across new bonds due dates.
Offers end on December 19
Offers may only be submitted starting from December 5, 2022, and ending at 4:00 p.m. (Greenwich Mean Time (GMT)) on December 19, 2022.
Sole discretion to extend expiration date
However, government may at its sole discretion extend the expiration date, including for one or more series of eligible bonds.
Only registered holders eligible
The invitation is available only to registered holders of eligible bonds that are not individual investors or that are otherwise authorised by the Government of Ghana, in its sole discretion, to participate in the Invitation.
Government said eligible holders tendering their eligible bonds pursuant to the invitation will receive new bonds of the country on the terms and subject to the conditions described in the Exchange Memorandum.
All offers irrevocable
All offers to exchange eligible bonds made by eligible holders are irrevocable and by tendering their eligible bonds, eligible holders represented and warrant.
Eligible bonds
Such eligible bonds constitute all the eligible bonds owned by them and consent to the blocking by the Central Securities Depository of any attempt to transfer them prior to the settlement date or the termination of the invitation.
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Economy
IMF tells external creditors to support Ghana

Government says it is confident of getting financing assurances from its external creditors in a short time to secure a Management Board approval from the International Monetary Fund (IMF).
Restoring debt sustainability
This follows successful talks with China and Paris Clubs with a call by the International Monetary Fund (IMF) asking all bilateral creditors to support Ghana’s efforts to restore debt sustainability, as the country works towards presenting its economic programme for IMF Executive Board approval.
Positive and encouraging meetings in China
“So far had very positive and encouraging meetings in China,” the Ministry of Finance said in a Tweet on Friday.
Outstanding domestic revenue bills
“Looking forward to securing external assurances very soon, even as we pass our outstanding domestic revenue bills back home. Great progress on all fronts,” the Tweet added.
Financing assurances
Director of Communications at the IMF, Julie Kozack, stressed the importance of Ghana securing financing assurances from partners and creditors, as a necessary step towards the presentation of its programme $3 billion request to the IMF’s Executive Board for approval.
Bilateral creditors
“We’re calling on bilateral creditors to support Ghana’s effort to restore debt sustainability, form an official creditor committee, and deliver the necessary financing assurances as soon as possible,” Madam Kozack said at a news conference in Washington DC in the United States of America.
“While the IMF is engaging the Ghanaian authorities on the progress made on its request, the Fund is also seeking the assurances from Ghana’s partners,” she added.
Objectives of IMF prograame
The $3 billion IMF programme aims to support common efforts to restore macroeconomic stability, debt sustainability, while also protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive growth.
5 agreed Prior Actions
Out of the five agreed Prior Actions in the Staff Level Agreement government has already completed three.
3 agreed Prior Actions fulfilled
These are tariff adjustment by the Public Utilities Regulatory Commission (PURC), Publication of the Auditor-General’s Report on COVID-19 spending, as well as onboarding of Ghana Education Trust Fund (GETFund), District Assemblies Common Fund (DACF) and Road Fund on the Ghana integrated financial management information system (GIFMIS).
The fourth is the passage of the Income Tax (Amendment) Bill, Excise Duty and Excise Tax Stamp (Amendment) Bills which parliament is expected to do this week.
GH₵83 billion DDEP completed
A Domestic Debt Exchange Programme (DDEP) swapped a total of GH₵83 billion worth of old bonds for new ones with the expectation of finishing similar exercise with its external creditors made up of bilateral partners and Eurobond investors.
IMF MD happy with progress
Managing Director of the IMF, Kristalina Georgieva, had said the Fund was happy with Ghana’s progress to present its SLA for the Fund’s review and approval.
Last week, China’s Foreign Ministry Spokesperson Wang Wenbin has stated that China attaches great importance to resolving Ghana’s debt issues and understands the difficulties facing the country at the moment.
Enhanced communication
“We would like to enhance communication with Ghana to work out a proper settlement through consultation,” he said.
Joint efforts of international partners required to resolve debt issues
He pointed out that properly resolving the issues concerning Ghana’s debt requires the joint efforts of Ghana and all international partners.
Regular Press Conference
Wenbin made the remark a Regular Press Conference held on March 22, 2023, in response to a question on Ghana’s finance minister visiting Beijing for a proposed restructuring of Ghana’s debt.
Ghana-China meeting confirmed
Wenbin confirmed a planned meeting between a high powered Ghanaian delegation led by Finance Minister Ken Ofori-Atta and officials of competent departments of China on bilateral cooperation in relevant areas.
Institutions the delegation will meet
The delegation is expected to hold discussions with officials of the Finance Ministry of China, Central Bank of China, and China’s Eximbank, principally over how to cross the debt restructuring line with China, ideally as part of the common framework with the Paris Club.
Key stakeholders in debt relief efforts
Wenbin stated that China always believes that multilateral financial institutions and commercial lenders, who are the main creditors for developing countries, need to participate in developing countries’ debt relief efforts.
China’s loans account for less than 5% of Ghana’s total public debt
He stressed that official bilateral loans related to China only account for less than five percent of Ghana’s external debt.
$54bn total public debt stock
Ghana’s total public debt stock stands at $54 billion, out of which $28 billion is owed to foreign creditors.
Ghana owes China $1.9bn
Out of Ghana’s $8.5 billion bilateral loans, about $1.9 billion is owed to China.
Important cooperation partner in Africa
Wenbin described Ghana as China’s important cooperation partner in Africa.
Cooperation yielded tangible benefits to both sides
According to him, in recent years, practical cooperation between the two countries has yielded fruitful outcomes and brought tangible benefits to both sides.
Chinese Delegation visited Ghana earlier
In the first week of March this year, a Chinese Delegation was in Ghana for a 3-Day mission to engage the Government of Ghana, following a request for the restructuring of Ghana’s $1.9 billion debt owed to China.
Delegation examined indebtedness to China
The meeting between officials of the Ministry of Finance and their counterparts from China examined Ghana’s indebtedness to China and the possible ways the Asian giant can support the government’s external debt restructuring – a precursor to a bailout from the IMF to resuscitate the economy.
Data sharing
There was data sharing between the two governments, with discussions being held at the technical level, on the parameters of an effective debt treatment.
Ghana’s planned Mission to China
The team visited ahead of Ghana’s planned Mission to China, all in line with ongoing negotiations for a sovereign debt treatment.
Ghana seeking extension of maturities, debt servicing, lower interest rates
Information indicates that Ghana seeking among other reliefs, an extension of the moratorium on debt servicing; an extension of maturities; and lower interest rates.
$3bn staff-level agreement reached in December 2022
In December 2022, the government reached a staff-level agreement with the fund and is now left with board-level approval before it can access the $3 billion support.
Restructuring of domestic and external debt
However, the board-level approval is hinged on the country’s ability to restructure its domestic and external debt.
China remains a key partner for Ghana and it has consistently been a crucial part of the country’s socioeconomic development.
China had supported the country through vital projects that spurred growth and job creation nationwide.
The Chinese delegation, as part of the 3-day Mission met with the Vice-President, Alhaji Dr Mahamudu Bawumia, the Minister for Finance, Mr Ken Ofori-Atta, and technical teams from the Ministry of Finance.
The Chinese Ambassador to Ghana, Mr Lu Kun, also hosted the delegation at a luncheon yesterday.
In attendance were members of the Chinese delegation, the Minister for Finance, Mr Ken Ofori-Atta; Minister of Foreign Affairs, Ms Shirley Ayorkor Botchwey; Ghana’s Ambassador to China, Dr Winfred Nii Okai Hammond, and officials of the Ministry of Finance.
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Economy
China expresses interest in resolving Ghana’s debt issues

China’s Foreign Ministry Spokesperson Wang Wenbin has stated that China attaches great importance to resolving Ghana’s debt issues and understands the difficulties facing the country at the moment.
Enhanced communication
“We would like to enhance communication with Ghana to work out a proper settlement through consultation,” he said.
Joint efforts of international partners required to resolve debt issues
He pointed out that properly resolving the issues concerning Ghana’s debt requires the joint efforts of Ghana and all international partners.
Regular Press Conference
Wenbin made the remark a Regular Press Conference held on March 22, 2023, in response to a question on Ghana’s finance minister visiting Beijing for a proposed restructuring of Ghana’s debt.
Ghana-China meeting confirmed
Wenbin confirmed a planned meeting between a high powered Ghanaian delegation led by Finance Minister Ken Ofori-Atta and officials of competent departments of China on bilateral cooperation in relevant areas.
Institutions the delegation will meet
The delegation is expected to hold discussions with officials of the Finance Ministry of China, Central Bank of China, and China’s Eximbank, principally over how to cross the debt restructuring line with China, ideally as part of the common framework with the Paris Club.
Key stakeholders in debt relief efforts
Wenbin stated that China always believes that multilateral financial institutions and commercial lenders, who are the main creditors for developing countries, need to participate in developing countries’ debt relief efforts.
China’s loans account for less than 5% of Ghana’s total public debt
He stressed that official bilateral loans related to China only account for less than five percent of Ghana’s external debt.
$54bn total public debt stock
Ghana’s total public debt stock stands at $54 billion, out of which $28 billion is owed to foreign creditors.
Ghana owes China $1.9bn
Out of Ghana’s $8.5 billion bilateral loans, about $1.9 billion is owed to China.
Important cooperation partner in Africa
Wenbin described Ghana as China’s important cooperation partner in Africa.
Cooperation yielded tangible benefits to both sides
According to him, in recent years, practical cooperation between the two countries has yielded fruitful outcomes and brought tangible benefits to both sides.
Chinese Delegation visited Ghana earlier
In the first week of March this year, a Chinese Delegation was in Ghana for a 3-Day mission to engage the Government of Ghana, following a request for the restructuring of Ghana’s $1.9 billion debt owed to China.
Delegation examined indebtedness to China
The meeting between officials of the Ministry of Finance and their counterparts from China examined Ghana’s indebtedness to China and the possible ways the Asian giant can support the government’s external debt restructuring – a precursor to a bailout from the IMF to resuscitate the economy.
Data sharing
There was data sharing between the two governments, with discussions being held at the technical level, on the parameters of an effective debt treatment.
Ghana’s planned Mission to China
The team visited ahead of Ghana’s planned Mission to China, all in line with ongoing negotiations for a sovereign debt treatment.
Ghana seeking extension of maturities, debt servicing, lower interest rates
Information indicates that Ghana seeking among other reliefs, an extension of the moratorium on debt servicing; an extension of maturities; and lower interest rates.
$3bn staff-level agreement reached in December 2022
In December 2022, the government reached a staff-level agreement with the fund and is now left with board-level approval before it can access the $3 billion support.
Restructuring of domestic and external debt
However, the board-level approval is hinged on the country’s ability to restructure its domestic and external debt.
China remains a key partner for Ghana and it has consistently been a crucial part of the country’s socioeconomic development.
China had supported the country through vital projects that spurred growth and job creation nationwide.
The Chinese delegation, as part of the 3-day Mission met with the Vice-President, Alhaji Dr Mahamudu Bawumia, the Minister for Finance, Mr Ken Ofori-Atta, and technical teams from the Ministry of Finance.
The Chinese Ambassador to Ghana, Mr Lu Kun, also hosted the delegation at a luncheon yesterday.
In attendance were members of the Chinese delegation, the Minister for Finance, Mr Ken Ofori-Atta; Minister of Foreign Affairs, Ms Shirley Ayorkor Botchwey; Ghana’s Ambassador to China, Dr Winfred Nii Okai Hammond, and officials of the Ministry of Finance.
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Economy
3 hurdles to clear this week for IMF board to approve $3bn bailout

For the Board of the International Monetary Fund (IMF) to approve Ghana’s $3 billion bailout at the end of this month, Ghana needs to achieve three critical milestones this week.
Ghana has started to actively engage external debtors with the view to getting debt cancellation, especially from the Paris club of creditors.
The first stop of a government delegation seeking debt restructuring will be in China as that country holds $1.7 billion out of Ghana’s $5.7 billion bilateral debt.
Delegation to China
Finance Minister, Ken Ofori-Atta left Accra yesterday leading a high-powered government delegation to China to negotiate for the acceptance of the country’s proposal for debt cancellation with the Paris club.
The delegation will hold discussions with officials of the finance ministry of China, the central bank of China, and China’s Eximbank, principally over how to cross the debt restructuring line with China, ideally as part of the common framework with the Paris Club, which also includes Russia.
The Chinese who are not members of the Paris Club have so far dragged their feet.
Other non-member creditors like Saudi Arabia and India on the other hand, are expected to join the Paris Club meetings.
Delegation to meet Paris Club in France
From China, the delegation will travel to Paris in France to hold discussions with the Paris Club tomorrow, Tuesday, March 21, 2023.
That meeting is most critical in determining how quickly Ghana can secure the IMF deal.
In January, all member countries of the G20 group of economic powers said they are on board for a restructuring of Ghana’s debt and Paris Club members are ready to take the first step toward forming a creditor committee.
The work of the Committee will, typically, take about three weeks.
Tuesday’s meeting will set the ball rolling and give Ghana the greatest indication yet as to how quickly the anticipated IMF deal can be closed.
Forming a creditor committee took a couple months for previous cases, however the official said the Paris Club members were all ready to do so for Ghana and hoped it could be done in a month.
The official said Ghana’s case was less complex than Zambia, whose case the official said was progressing after struggling since it became the first African country to default after the pandemic.
The programme, which was launched in 2020, was supposed to streamline the process of coordinating among creditor governments the restructuring of low-income countries’ debts after the pandemic.
However, progress has proven glacial for the first cases; a situation Western countries say is in part due to a lack of restructuring experience by China, a non-Paris Club G20 creditor that has become a major lender in recent years.
3 Bills Parliament must pass
On Thursday Parliament will vote on three key revenue bills which must be passed to indicate Ghana’s seriousness and doing better than being below the continental average on revenue mobilisation.
The bills are the Income Tax (Amendment) Bill, the Excise Duty & Excise Tax Stamp (Amendment) Bills and the Growth and Sustainability Levy Bill.
The passage of these bills and a successful meeting with the Paris Club are the most crucial things the IMF Board will require to approval the deal for Ghana.
Ghanaians now can only wait and see the timetable to be set by the 22-member nations Paris Club, which holds majority of the country’s bilateral debts.
But, Ghanaian officials have been having prior engagements with the creditor nations involved, why should all help speed up the process.
Ghana hopes Ofori-Atta’s trip can help get China to join the Paris Club meetings, which will agree on a common framework for all its member creditors, including Belgium, UK, USA, Japan, Denmark and the Netherlands.
Alternatively, failing which, Ghana can do a separate bilateral deal with China, but on similar principles of restructuring. That is also at the heart of the Ghanaian delegation’s business in China this week. The team should return next Sunday.
Parliamentary action
The nation’s fate after the successful implementation of the Domestic Debt Exchange Programme is also now heavily dependent on Parliament who meet this Thursday 23 March to vote on the three revenue bills.
Members of Parliament from the National Democratic Congress caucus have been directed by the NDC secretariat to vote against the three bills.
Minority Leader, Cassiel Ato Forson last week suggested that the seeming delay in agreeing on a debt restructuring deal with China is what could kill the IMF deal but was silent on the bills the House is required to pass.
The China factor
Ofori-Atta who left Accra Sunday afternoon will first stop over in Addis Ababa, Ethiopia, to attend the African Finance Ministers’ meeting, which will revolve around the continent’s suffocating debts.
He will meet United Nations Economic Commission for Africa (UNECA) as well, again on concerns over Africa’s growing indebtedness, especially since Covid-19.
Negotiation with external creditors
Negotiations with Eurobond holders are said to have been significantly smoothened since the successful completion of the Domestic Debt Exchange Programme (DDEP) and in principle, a framework of a deal with holders of Eurobond has been fashioned out.
Ghanaian officials have met with all executive directors of the IMF, including Germany, the United Kingdom, France, Japan, and the USA.
Ghana will most likely be looking after the Spring Meetings of the IMF and World Bank in Washington DC, which will take place from April 10 to 16 2023, for the IMF Executive Board.
The IMF and Ghana reached a staff-level agreement on the U$3 billion loan deal in December 2022. Ghana was expected to conclude its domestic debt restructuring by end of January but that was also delayed due to an understandable struggle with bondholders and their representatives on the nature, structure and scope of the domestic debt exchange exercise.
The decision by the Paris Club to only now meet on Ghana has also meant that the IMF deal will have to wait for the work of the Paris Club’s Creditors Committee to be completed on the common framework first.
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