Ghana on track to meet debt sustainability targets - Finance Minister

Finance Minister, Ken Ofori-Atta has given an insight into discussions with creditors following the completion of the Domestic Debt Exchange Programme which is critical in restoring debt sustainability.

Speaking during an investors meeting in London on October 16, 2023, Ken Ofori-Atta shared that discussions with creditors centered on strong commitment to comply with the IMF/World Bank Low-Income Country Debt Sustainability Framework targets.

He highlighted some of these overarching targets, which is in line with the debt restructuring operation to restore Ghana’s debt sustainability position.

“Firstly, reducing the Debt-to-GDP ratio to below 55% by 2028 in present value terms at 5% discount factor (from 89% at the end of 2022), Secondly, reducing the external debt service-to-revenue ratio to below 18% from 2028 onwards (from 28% in 2022), and Thirdly, (iii) ensuring no external financing gap during the programme period,” Ken Ofori-Atta explained.

He further pointed out that the fiscal effort, combined with the successful domestic debt restructuring, contributes to decrease government debt from 109% to 72% of GDP by 2028 pre-external debt restructuring, thus leaving a relief required from other creditors of 17 percentage points.

“As you can see, the effort requested from our external creditors is broadly the same now as compared to what it was in our previous Investor Presentation in May,” Ken Ofori-Atta shared during the investors meeting in London.

Meanwhile, Ghana is targeting to secure the second tranche of the $600 million package in November this year with plans to further engage bilateral creditors on an external debt restructuring programme.

The Ministry of Finance on its part has called on its bilateral creditors to swiftly come to an agreement to enable Ghana secure the second bailout package of the $3 billion Extended Credit Facility.

MA

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