An overview of Ghana’s 2022/23 domestic debt restructuring programme

Ghana is currently experiencing one of the most challenging economic times in recent years. Like many other countries around the world, the economic challenges in Ghana have been exacerbated by external shocks including the Covid-19 pandemic and the war in Ukraine/Russia. The country is experiencing anemic economic growth, high unemployment, elevated inflation, severe currency depreciation, loss of external capital market access, deteriorating gross international reserves and a looming public debt crisis. The ministry of finance through a debt sustainability analysis (DSA) has declared public debt to be unsustainable. The present value (PV) of Public and publicly guaranteed (PPG) debt to GDP ratio as at November 2022 stood at 100.34%. The government has set a PV of PPG debt to GDP ratio of 55% by the end of 2028 to achieve debt sustainability. To restore debt sustainability and macroeconomic stability, the government requested for assistance from the IMF. As part of the condition to unlock about $3 billion of IMF funds, the government was tasked to restructure public debt. It is obvious that the government intends to restructure both domestic and external debt. As the time of writing, details of the external debt restructuring are yet to be made public. However, the government has just concluded the domestic debt restructuring after a series of negotiations with domestic bondholders.