The President, Nana Addo Dankwa Akufo-Addo, has announced that most of the projects being executed by his government, but have currently been stalled, because of the negotiations with Ghana’s international creditors will restart resume.
According to him, the resumption of the stalled project is owed to successful negotiations on the restructuring of Ghana’s debt.
President Akufo-Addo made the announcement on Monday, June 24, 2024 at a ceremony in Jubilee House to present credentials to nine newly appointed diplomats.
The President, in his remarks, which highlighted the significant development for Ghana’s economic recovery, detailed the positive outcomes of these negotiations and their implications for Ghana’s development.
The President noted that Ghana’s agreement with bilateral creditors, coordinated through the Ghana Official Creditor Committee (OCC) and co-chaired by France and China, resulted in the restructuring of $5.1 billion of Ghana’s debts.
He noted further that the agreement is expected to provide a cash flow relief of approximately $2.8 billion, or GH¢39 billion, in debt service, postponed between 2023 and 2026 to be repaid later at a cheaper interest rate.
“The agreement with our bilateral debt holders will lead to a cash flow relief of around $2.8 billion or GH¢39 billion in debt service. This will enable us to resume and complete many projects that are vital for our nation’s progress,” he asserted.
PROJECTS
These projects, the President said, will include improvements in healthcare, education, transportation and other essential sectors, are vital for Ghana’s progress and development.
Though the President did not mention any specific projects, Ghanaians may have observed, among others, that there are many interchanges ongoing across the country, which works were halted due to financial constraints. There is an ongoing interchange project at Suame, Kumasi, Tamale and Takoradi among others.
The government’s year of roads agenda hit a snag at a point, owing to the same issue of financial incapability, forcing contractors to vacate sites. Ghanaians may not have forgotten about the Agenda 111 hospital projects, which are at various stages of completion.
DEBT RESTRUCTURE
The President outlined the completion of three major debt restructuring operations: domestic debt restructuring, external bilateral debt restructuring and commercial bondholders debt restructuring.
He explained that these efforts have provided much-needed financial relief and set the stage for a renewed focus on critical infrastructure and development projects, as they have put Ghana’s domestic debt-to-GDP ratio on a clear downward trend.
He added that, “the successful negotiations mean that bondholders will 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.”
He stated that the domestic debt restructuring achieved a high participation rate of almost 95%, as coupon rates were reduced from 21% to 9% on average and maturities were extended, easing the near-term local debt service burden that previously consumed more than 40% of the country’s tax revenues.
He explained that this restructuring has set the domestic debt-to-GDP ratio on a path to reach 55% by the end of 2028.
IMF
President Akufo-Addo further stated that the external bilateral debt restructuring has been a crucial milestone in Ghana’s economic recovery efforts. He explained that the successful negotiations have also paved the way for the International Monetary Fund’s Executive Board to convene and approve Ghana’s second review of the fund program, resulting in a further disbursement of $360 million in support of the program.
BONDHOLDERS
The President indicated that one of the most notable achievements in the debt restructuring process is the agreement with commercial bondholders.
He said that the restructuring of $13.1 billion of debts resulted in significant savings for the government, including the cancellation of $4.7 billion, or GH¢65 billion, from the debt stock. Additionally, Ghana will save $4.4 billion or GH¢60 billion in debt service, providing further financial relief during the IMF Programme.
“The savings include the cancellation of $4.7 billion from the debt stock and $4.4 billion in cash flow relief during the IMF Programme. This comprises principal savings of $1.5 billion and interest savings of $2.9 billion,” he noted.
NEW DIPLOMATS
President Akufo-Addo administered three oaths to the nine newly appointed diplomats: the oaths of allegiance, office, and secrecy. He then told them that they were expected to play a crucial role in promoting Ghana’s economic agenda on the global stage.
“Your primary responsibility is to promote the image of Ghana as a stable, peaceful, and forward-looking country,” the President told the new envoys.
He said it entailed engaging with your host nations to foster strong bilateral relationships, attract investments, and advocate for the interests of Ghana.
The nine newly sworn-in envoys include; Major-General Nicholas Peter Andoh (Rtd), Ghana’s Ambassador to Turkey; Vice Admiral Seth Amoama, High Commissioner to Nigeria; Mrs. Francisca Ashietey-Odunton, High Commissioner to South Africa and Mr. Henry Tachie-Menson, Ambassador to Belgium.
The rest are: Mrs. Charity Gbedawo, Ambassador to Morocco; Ms. Abigail Adzoko Kwashi, Ambassador to Norway; Dr. Robert Afriyie, Ambassador to Ethiopia; Mr. Ernest Yaw Ampofo, High Commissioner to Rwanda and Nana Bediatuo Asante, Ambassador at Large.
