Finance Minister, Ken Ofori-Atta, has noted that debt servicing consumes about 70% or sometimes 100% of government's revenue.
This, he said, cripples government despite moves to put the local economy on a sound footing.
To help resolve this challenge, government has rolled out a debt restructuring programme to restore its capacity to service its high-rising debt.
"The extent to which our interest charges consume some 70% and sometimes 100% of our revenues is something that is not sustainable and it is really a recalibration therefore of the whole interest rate regime so that we move into a sustainable orbit," Ken Ofori-Atta said.
"Debt servicing is consuming almost all of government’s revenue and also 70 per cent of tax revenue...which is why we are announcing this [debt restricting programme] to restore our capacity to service debt.
He stated that under the debt exchange programme all domestic bondholders will exchange their instruments for new ones.
Existing domestic bonds as of December 1, 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, and 2037.
The annual coupons on all of these bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
ESA/FNOQ
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