President Nana Addo Dankwa Akufo-Addo has lauded the country’s economic recovery efforts, following the successful restructuring of $13 billion worth of Eurobonds.
This development, which has returned Ghana to international financial markets, marks a crucial milestone in stabilizing the nation’s finances and economic trajectory.
On June 24, 2024, the Republic of Ghana reached an agreement with the Ad Hoc Group of International Bondholders to restructure its Eurobond debt. This agreement was endorsed by the International Monetary Fund (IMF), ensuring compliance with its program requirements, and gained approval from Ghana’s Official Creditor Committee. After months of negotiation, the restructuring was finalized on September 5, when over 90% of bondholders voted in favor of the deal.
Akufo-Addo expressed his pride in the achievement, emphasizing that this success signaled a turning point for Ghana’s economy. In his address, he stated:
“Today, our economy has turned a corner. This landmark achievement ushers in a new phase of economic recovery, returning Ghana to a sustainable debt path and putting us back on the investor map. We’ve accomplished what everyone said was impossible – we decisively resolved Ghana’s debt overhang problem.”
The restructuring is expected to provide significant financial relief for Ghana, reducing the national debt stock by $4.7 billion and offering $4.4 billion in cash flow relief over the next two years. The government has attributed this restructuring to an increase in market confidence, reflected in Ghana’s 6.9% GDP growth in the second quarter of 2024—the highest recorded in the past five years.
Minister of Finance and Economic Planning, Mohammed Amin Adam, expressed optimism about the positive effects of the debt restructuring on Ghana’s macro-financial outlook. He highlighted the progress in reducing inflation and improving growth projections as key indicators of Ghana’s economic recovery.
“Today’s completion of the restructuring will help Ghana restore debt sustainability, reducing the debt stock by $4.7 billion and providing cash flow relief of approximately $4.4 billion in the next two years,” Adam noted.
The settlement and delivery of new debt instruments are scheduled for October 9, 2024, replacing the old bonds with securities under revised terms.
The World Bank will also play a role in supporting the settlement process, with payments scheduled for the end of October. The government has also acknowledged the critical contributions of its advisors and partners, including Lazard Frères, Hogan Lovells, and Algest, who assisted in navigating the complexities of the restructuring deal.
This restructuring represents a critical step in the government’s broader strategy to restore fiscal stability and enhance investor confidence. The administration remains committed to advancing reforms aimed at further economic growth and job creation for Ghanaians.