Govt assures external creditors of their equal importance to the Republic of Ghana

Govt assures external creditors they are important for the Republic of Ghana

The Ministry of Finance has said that the Government of Ghana will continue to work with external creditors to seek progress in the treatment of external debt in order to ensure Ghana’s long-term macroeconomic stability.

The Ministry assured external creditors of equal importance to the Republic of Ghana.

“The newly issued bonds have been defined and listed and will become the new benchmark bonds for the fixed income market.

“The Ministry of Finance will cooperate with the relevant stakeholders, as agreed, to ensure that these new benchmark securities form the basis for the deepening of the country’s bond market,” the Ministry of Finance said in a statement.

He added “In order to comply with the guarantee given by the government to bondholders who did not tender, the Ministry took administrative measures to ensure the payment of coupons and principal of the old bonds continued on March 13, 2023.”

The Ministry also said that S&P Global Ratings raised the local currency of Ghana’s country’s credit rating from selective standard (SD) to ‘CCC / C’, acknowledging the successful completion of the Domestic Debt Exchange Program (DDEP).

He noted that “on Friday, February 24, 2023, S&P Global Ratings upgraded Ghana’s local currency credit rating from selective default (SD) to ‘CCC /C’. This recognizes the completion of the DDEP with the successful delivery of new securities to bondholders. By doing so , the selected standard will be significantly treated.

“The above mentioned milestones are expected to accelerate our engagement with external creditors. The Government of Ghana also took the opportunity to assure our external creditors of equal importance to the Republic of Ghana.

“As such, we will continue to work together to advance the external debt treatment process to ensure Ghana’s long-term macroeconomic stability.”

The Managing Director of the International Monetary Fund has called on the Paris Club group of creditor countries to speed up the process of restructuring Ghana’s debt, warning that further delays will undermine the country’s stability.

Kristalina Georgieva called on G20 countries to speed up the formation of the Creditors’ Committee for Ghana, which is needed to restructure its external debt of 382 billion cedis ($29.1 billion).

“It is now critical to complete the restructuring of Zambia’s debt, establish a Creditors’ Committee for Ghana, and work with Ethiopia,” the IMF chief appealed at the first meeting of G20 Finance Ministers and Central Bank Governors in Bengaluru, India.

The creditors’ committee will enable Ghana to formally seek financial guarantees from bilateral creditors and gauge its willingness to participate in debt restructuring negotiations.

Ghana restructured its total public debt, about 575 billion cedis, to secure a $3 billion bailout from the IMF.

The country completed a domestic debt swap this month after five extensions of the deadline for bondholders to participate in the swap.

Kristalina’s appeal comes a day after Germany’s ambassador to Ghana held an unusual press conference to discuss the conditions that must be met before Paris Club members will agree on a debt relief package for the chocolate-producing country.

Daniel Krull warned that the country’s bailout request with the IMF would be in jeopardy unless China agreed to a joint debt relief package.

“The big elephant in the room is China. China is Ghana’s biggest creditor and so far it does not support the creditors’ committee, where the creditors will sit and agree on an aid package for Ghana,” said the German diplomat during a press engagement.

China is Ghana’s largest bilateral creditor with $1.7 billion in debt, while the country owes $1.9 billion to Paris Club members.

By Laud Nartey|3news.com|Ghana

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