Government needs to plan to consolidate all Eurobonds and external debt into a consolidated loan facility, a Partner at Deloitte Ghana, Yaw Appiah Lartey, has stated.
He said after the bonds and external debts are restructured, all existing subscribers would sign onto it with different terms.
Mr Appiah Lartey stressed that it is important government goes to the table with a plan that shows that it would be able to service its debt if subscribers sign onto it.
Also, external debt holders need to be assured that they will be able to redeem their losses after the haircut.
Speaking in an interview with Joy Business, the financial advisor said, “It is important we have a plan to consolidate all our Eurobonds and all our external debt into what we call a consolidated loan facility or consolidated Eurobond; restructure them, and have existing subscribers sign onto it with different terms.”
Mr Appiah Lartey explained that, “It’s important that we go to the table with the plan that shows that we would be able to service our debt if they sign onto the new plan and also if the external debt holders are taking a haircut, they are taking a haircut with the view that they will redeem their losses...You don’t want to take a haircut and then somewhere down the line, the government will be unable to service a new restructured debt.”
Ghana’s official creditors met on Monday, January 8, 2024, to discuss restructuring some US$5.4 billion in loans to the country.
The meeting was crucial to Ghana securing its next tranche of funding from the International Monetary Fund (IMF).
Ghana is expected to receive some $1.15 billion in funding from the International Monetary Fund and the World Bank by the end of February.
This comes as bilateral creditors are nearing an agreement on the country’s debt restructuring terms.
SA/NOQ
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Partner at Deloitte Ghana, Yaw Appiah Lartey