Investors holding Eurobonds issued by the government can smile to the bank to cash out, as President Nana Akufo-Addo has assured $346 million in coupon payments.
In his final State of the Nation Address (SONA), on January 3, President Akufo-Addo said:
“I am happy to inform the House that today, 3rd January 2025, my government will honour coupon payments to our Eurobond holders amounting to three hundred forty-six million US dollars ($346 million). We cannot afford to default on our debt repayments.”
Ghana successfully restructured its $13 billion Eurobond portfolio in October 2024, exchanging the old bonds for new ones. The restructuring was a key step in Ghana’s debt restructuring efforts, which were expected to help the country restore its debt sustainability.
There are positive signals after Ghana’s struggle to honour debt obligations plunged the country’s credit ratings to distress levels.
Consequently, the government wants to maintain credibility and financial stability.
Ghana is currently engaged in an International Monetary Fund (IMF) programme, aiming for a US$3 billion bailout to support economic recovery.
On July 1, 2024, the country received a third tranche of funding totalling US$360 million after a successful performance review by the IMF. The Fund has indicated that Ghana’s overall performance under the programme has been strong.
Before that, the Eurobond restructuring reduced Ghana’s debt by 37%, or $5 billion, and is expected to save $4.3 billion in debt service during the IMF programme.
It also lowered interest on bonded debt from an average of 8% to less than 5%.