Ghana Extends Debt Exchange Deadline Again
Ken Ofori-Atta, Finance Minister

Ghana Extends Debt Exchange Deadline Again

For the third time, Ghana has again extended the deadline to register for its domestic debt exchange to Jan. 31, Ken Ofori-Atta, Finance Minister hints about this in a statement on Monday.

Accra had in December launched a debt swap plan as a government planned to restructure its debt profile after a borrowing crisis that drag its local currency downward significantly. The government has obtained a $3 billion funding lifeline after securing a staff-level agreement with the International Monetary Fund.

“Building consensus is key to a successful economic recovery for Ghana,” Ofori-Atta wrote on Twitter, adding that registration for the debt exchange would be extended “pending further stakeholder engagement”.

The IMF has said its board will approve the deal only if Ghana undergoes comprehensive debt restructuring. The deadline for the debt swap, initially set for Dec. 19, had previously been extended to Dec. 30 and then to Jan. 16.

Revisions to the initial offer granted exemptions to pensioners after a public outcry but later brought in individual bondholders who were originally exempt. Unlike previous extensions, Monday’s failed to offer bondholders any additional incentives.

Without new terms, investors fear the programme could struggle to attract participants. Meanwhile, repeated extensions and frequent structural changes have done little to encourage participation.

Last week, the government offered to pay holders of its 2023 bond a 2% cash fee in exchange for registering for the exchange, but opposition to the programme has remained pervasive.

MarketForces Africa reported in 2022 that major rating agencies, including Fitch and Moody’s, have downgraded Ghana’s sovereign rating amidst the crisis. >>>>Ghana Slams MTN $773m Tax Bill After Audit

“The downgrade reflects the increased likelihood that Ghana will pursue a debt restructuring given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to Eurobond markets.

“There is a high likelihood that the IMF support programme currently being negotiated will require some form of debt treatment due to the climbing interest costs and structurally low revenue as a percentage of GDP”, Fitch said in a rating note.

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