The government will on Monday launch the Debt Exchange programme announced in the 2023 budget.
This is after series of engagements with key stakeholders.
The Ghana Debt Exchange (GDX) programme has been informed by a Debt Sustainability Analysis that revealed public debt (excluding overdraft, state owned enterprises (SOEs) and special purpose vehicles (SPVs) as a ratio of Gross Domestic Product (GDP) to be 75.9 per cent as at end September 2022.
The Minister of Finance, Ken Ofori-Atta, in the 2023 Budget Statement said a full debt exchange programme will be outlined.
The Bank of Ghana also alluded to that in its Monetary Policy Report issued of November 28, 2022.
The debt operation is part of a comprehensive set of measures for reducing the present value of public debt to Gross Domestic Product (GDP) ratio to, at least, 55 per cent in the medium term by offering an effective cap on interest payments on public debt. Sources indicate that except for Treasury Bills (T-bills), all locally issued bonds and notes of the government will be eligible in the domestic debt exchange.
This suggests that bonds and notes denominated in US dollars and bonds issued by ESLA and Daakye will be eligible under the GDX.
Available information indicates that the proposed GDX, which invites eligible holders to voluntarily tender their holdings, does not entail any nominal haircut, as promised by President Akufo-Addo.
However, it involves extending the maturity period and a reduction in the average coupon rate.
Persons close to the issue have intimated that the debt exchange programme will complement both expenditure rationalisation and revenue-enhancing measures outlined in the 2023 Budget and enable Ghana to unlock the IMF programme disbursements, which is critical to mitigating the current pressures on public finance, the Cedi and inflation.
