Atik Mohammed is excited with the latest news on Ghana's debt restructuring programme.
Ghana has reached an agreement with two bondholder groups to restructure some $13 billion of international debt, a negotiating group, marking a key step in the country’s economic recovery under an International Monetary Fund (IMF) loan deal.
The agreement, which will see Eurobond holders take a haircut of 37 per cent or $4.7 billion in addition to delayed repayments, represents the third and final step in the country’s external debt restructuring negotiations.
The Committee of Holders of Ghana’s Eurobonds (the Committee) which announced this yesterday, said the proposed agreement on the restructuring of the Eurobonds would resolve Ghana’s default on the Eurobonds in a manner that provided significant cash flow and debt stock relief to support the country’s economic recovery, a publication on Graphic.com.gh stated.
“The non-financial provisions included in the agreement-in-principle, such as the semi-annual disclosure of public debt, the most-favoured-creditor clause and loss reinstatement clause, are part of the package of measures to normalise relations with bondholder investors and to progress towards restoring Ghana’s international market access,” the statement from the Committee indicated.
According to the Finance Minister, Dr Mohammed Amin Adam, “indeed, this is a significant concession that will allow us to efficiently navigate our path towards debt sustainability, even while continuing to ensure fiscal prudence and efficient revenue mobilisation”.
“Bondholders have graciously agreed to provide $4.4 billion in cash flow relief during the IMF programme, in addition to the cancellation of $4.7 billion of the debt stock,” Dr Amin Adam added.
To Atik, "however we got here, we all know. The refreshing news for me is that finally we are able to get this. Some fiscal space will come. The government can wiggle its way through things and the pressure on debt servicing will reduce. We can also begin to build our credit up again in the eyes of investors and the capital markets. For me, that is very crucial".
He refuted claims that on account of this debt restructuring programme, Ghana is bankrupt.
"Ghana is not insolvent...When they say a country is bankrupt, I'm not sure Ghana qualifies as an example. I don't believe it. Even though like I said the fact that you are in crisis doesn't necessarily mean you are bankrupt. I don't think so," he told Kwami Sefa Kayi on Peace FM's "Kokrokoo" morning show.
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