Finance Minister Dr Mohammed Amin Adam has disclosed that the government is close to completing its debt restructuring programme with only $2.7 billion of commercial bilateral creditor debt remaining to be restructured.
In an interview on the IMF Today programme during the Annual IMF/World Bank meetings in Washington, DC, he noted that significant progress has been made in restructuring the outstanding debts.
He emphasised that once the commercial creditors’ debt is restructured, Ghana can consider the entire process completed.
“If Ghana can conclude this outstanding commercial creditor debt, then we can say that the entire process has been completed,” the minister said.
The finance minister further stated that Ghana is on track to achieving debt sustainability by 2028, given the progress made in restructuring its debts.
Savings from Domestic Debt Exchange Programme
Dr Amin Adam revealed that the government has saved $12 billion after it completed restructuring Ghana’s bilateral debts and the Eurobonds describing the restructuring as highly successful.
He highlighted that the debts owed to bilateral creditors alone resulted in $2.8 billion in debt service relief.
He also announced, “The benefits we have secured so far from this process include an outright debt cancellation of about $5 billion and additional debt service relief of $4.3 billion.”
Summing up, the finance minister explained, “Between the bilateral creditors and the Eurobond, we are talking about a savings of $12 billion.”
Lessons and Commitment to Fiscal Responsibility
When asked about lessons from Ghana’s Debt Exchange Programme, Dr Amin Adam highlighted three key points.
He credited the simplified process for all investors as a major factor contributing to the success of the programme.
“We had to demonstrate to external creditors that our domestic investors were also prepared to sacrifice,” he said, referring to what he called “burden sharing” as a crucial element in the programme’s success.
Transparency in the process also played a vital role, with the finance minister explaining that openness helped Ghana achieve these results.
Assurances of Fiscal Discipline
To further assure creditors and investors, Dr Amin Adam outlined several measures aimed at enhancing fiscal discipline.
He revealed that the government plans to publish its debt levels every quarter and half-yearly to allow for continuous tracking of debt servicing.
“We are also working to impose a debt limit on government borrowing, as well as establish a fiscal council to monitor government finances and borrowings,” Dr Amin Adam stated.
He maintained that these measures would provide investors with the necessary assurance that the government is committed to fiscal responsibility.
Source: George Wiafe, Washington DC