Dr. Cassiel Ato Forson and Ken Ofori-Atta
The Minister of Finance, Dr. Cassiel Ato Forson, at the presentation of the 2025 Budget and Economic Policy statement, gave an update on the debts the country has to pay within the next four years due to the debt restructuring exercise the Nana Addo Dankwa Akufo-Addo-led government embarked on.
According to Dr. Ato Forson, due to the Domestic Debt Exchange Programme (DDEP) undertaken by the Akufo-Addo government, the John Dramani Mahama administration has to pay over GH¢150 billion from 2027 to 2028.
“Mr. Speaker, the Domestic Debt Exchange Programme has resulted in huge domestic debt service payments. Over the next four years, the country is expected to pay about GH¢150.3 billion, representing 11.6% of GDP in domestic debt service obligation alone, of which 73.3% is due in 2027 (GH¢57.6 billion) and 2028 (GH¢52.5 billion).
“The debt service obligations of 2027 and 2028 are major humps. These humps are cancerous and pose a significant risk to the economy, but we shall fix it! Our debt service obligation for this financial year is equally burdensome, with significant humps in February (GH¢9.9 billion), July (GH¢6.2 billion) and August (GH¢10.1 billion),” the minister said.
Dr. Ato Forson also disclosed that the government has to pay over $8.7 billion in external debt due to the Akufo-Addo administration’s restructuring of the country’s external debts.
“Mr. Speaker, beyond domestic maturities, Ghana faces significant external debt service obligations over the next four years totalling US$8.7 billion, representing 10.9% of GDP, with heavy concentration in 2027 and 2028.
“Again, 55% of the total external debt service of US$8.7 billion is due to be serviced in 2027 (US$2.5 billion) and 2028 (US$2.4 billion),” he said.
He said that the action of the Akufo-Addo government has made 2027 and 2028 very debt-heavy years for the country.
He promised Ghanaians that despite the huge task ahead, the Mahama government would rise to the occasion and transform Ghana’s economy.
About the DDEP and the external debt restructuring:
Ken Ofori-Atta, when he was Minister of Finance, on Sunday, December 4, 2022, announced a number of measures under the government’s Domestic Debt Exchange (DDE) programme.
This announcement was in line with the government’s debt sustainability analysis, as contained in the 2023 budget he presented to Parliament on November 24, and it gave entities up to December 30, 2022, to indicate their participation in the programme.
The minister laid out, among other things, the exchange of existing domestic bonds with four new ones, as well as their maturity dates and terms of coupon payments.
Under this initial offer, for bondholders with bonds maturing in 2023, the government promised four new bonds that were expected to mature in 2027, 2029, 2032, and 2037, and 0% interest in 2023, 5% interest in 2024, and 10% interest in 2025, which will continue till the maturity of your bond.
After the restructuring of the domestic debt, Ofori-Atta also moved to do the same for the country’s external debts.
BAI/SEA
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