Ken Ofori-Atta, the Finance Minister

Finance Minister, Ken Ofori Atta, has reiterated that the current state of Ghana’s debt is due to the lingering effects of the Covid-19 pandemic and the Russia–Ukraine war.

This, he said, has been exacerbated by the high macroeconomic instability experienced in 2022, occasioned by downgrades by rating agencies as well as the consequential pressures on government finances due to the actions of non-resident investors and the delayed passage of revenue bills.

Addressing Parliament today on the status of the Domestic Debt Exchange, the Finance Minister said “this situation is further compounded by the comparatively low levels of domestic revenue collected by government. In 2022, tax to GDP was just about 12.6%; woefully below the SSA average of 18% and insufficient enough to meet pressures on the public purse”.

Following the inception of negotiations with the International Monetary Fund, Mr. Ofori-Atta, said t was agreed that Ghana would have to address its economic challenges on three fronts – embark on fiscal consolidation, undertake debt operations and secure financing assurances from development partners.

He continued that “as I have indicated earlier, the domestic debt exchange programme was to alleviate the debt burden while minimising its impact on investors and the financial sector. Participation in the programme has always been ‘Voluntary’. The details of the domestic debt exchange are outlined in the Exchange Memorandum, and the subsequent amendments have been publicly available”.

 The coverage of the Exchange includes all locally issued bonds and notes of government as well as ESLA Plc and Daakye Plc bonds. Based on the results of the audit of the public debt, government excluded Treasury-bills and Pension Funds from the exchange.

Out of the total ¢97,749,624,691 eligible bonds were tendered, ¢82,994,510,128 was successfully tendered.

This accounted for about 85% of outstanding eligible amounts and met the target of 80% as expressed in the Memorandum of Exchange.

“Government is however mindful that the Gh¢82,994,510,128 bonds that were successfully tendered represents 64% of the outstanding debt stock of Gh¢130billion at the end of December, 2022”, Mr. Ofori-Atta.