How international media reported Ghana’s debt crisis, debt exchange programme

Ghana’s debt crisis has featured widely in international media for some months now, as the country’s debt continues to rise due to inflationary pressures coupled with a depreciation of the cedi.

Despite several assurances by the government that a debt restructuring was far from domestic bondholders and the investor community at large, it had to resort to it as a means to ensure debt sustainability.

The finance minister attested to the fact that Ghana’s debt-to-GDP ratio has exceeded 100%. He announced that Ghana’s government is inviting domestic bondholders to swap their debts for fresh ones with new maturity dates.

International media reported the country’s situation with emphasis on what the next move for Ghana and other African countries will be.

Reuters on December 9 said: “Ghana has begun restructuring its debt by rolling out a plan to swap $10.5 billion in local bonds with new ones, seeking IMF help and by preparing a proposal to restructure its foreign debt as the West African country struggles with its worst economic crisis in a generation.”

It also highlighted how “big” Ghana’s debt levels were and how the country plans on restructructuring to be able to obtain financial support from the International Monetary Fund.

The international news portal used an image from the #FixThecountry demonstration where Ghanaians hit the streets to demand for better living conditions.

Bloomberg said “Ghana asked local bondholders to accept losses on interest payments as it restructures its debt to qualify for a loan from the International Monetary Fund.

The West African country will replace existing local-currency debt with four new bonds maturing in 2027, 2029, 2032, and 2037, Finance Minister Ken Ofori-Atta said.”

Africanews in its headline said, “Ghana to swap local debt in fight to regain economic stability.”

It went further to say that “Ghana asked investors to exchange around $9 billion in domestic debt for new bonds on Monday (Dec.5) to ease a crunch in payments as the government negotiates an IMF bailout during its worst economic crisis in decades.

Bloomberg highlighted the country’s deteriorating debt position.

It said: “Ghana has the world’s worst-performing currency, inflation at 40% and its debt is junk. As it struggles to get to grips with a rapidly deteriorating situation, it’s now asking bondholders to accept losses on their investments.

“The government aims to start talks with investors before the end of the month. It’s hired Lazard Ltd., Global Sovereign Advisory, and Hogan Lovells US LLP as advisers, Reuters reported earlier this month. Some bondholders have tapped Rothschild & Co and Orrick, Herrington & Sutcliffe LLP as advisers, the Wall Street Journal reported,” the report stated.

SSD/BOG