Ghana has successfully re-entered the international financial markets after restructuring $13 billion in Eurobonds, marking a significant milestone in its economic recovery. This achievement comes after the country lost access to the international capital market due to unsustainable debt levels ¹.
The journey to this milestone began on June 24, when the Ad Hoc Group of International Bondholders and the Republic of Ghana reached an agreement in principle for restructuring the outstanding Eurobonds. The International Monetary Fund (IMF) approved this agreement, deeming it compatible with the program parameters and meeting the comparability of treatment requirements of the Official Creditor Committee for Ghana.
On September 5, Ghana launched a consent solicitation for its proposal to all bondholders, backed by the Committee of Holders of the Republic of Ghana’s Eurobonds. The outcome was overwhelmingly positive, with over 90% of bondholders voting in favor of the deal.
The transaction’s settlement and delivery of new debt instruments are scheduled for October 9, 2024, following the World Bank’s longstop date on October 7, 2024. This marks the beginning of a new phase in Ghana’s economic recovery, as old bonds will be exchanged for new securities under revised terms.
President Nana Addo Dankwa Akufo-Addo expressed his gratitude to bondholders, the IMF, and official creditors for their support, stating that Ghana has “accomplished what everyone said was impossible” by resolving its debt overhang problem. This achievement will enable Ghana to stabilize its finances and focus on implementing reforms to improve the well-being of its citizens.
According to Mohammed Amin Adam, Minister for Finance and Economic Planning, the restructuring will reduce Ghana’s debt stock by $4.7 billion and provide cash flow relief of approximately $4.4 billion in the next two years. This has already positively impacted Ghana’s macro-financial situation, reducing inflation and boosting growth projections.
Ghana’s Q2 2024 growth rate reached 6.9%, the highest quarterly GDP growth recorded in the past five years. The government remains committed to advancing its reform agenda and attracting new investment to foster growth and job creation.
The successful debt restructuring was made possible through collaborative efforts with various stakeholders. The Government extends gratitude to the Steering Committee of the Ad Hoc Creditor Committee of International Bondholders and their advisors, as well as the Steering Committee of the Creditor Committee of Regional Bondholders.
Ghana’s advisors, Lazard Frères, Hogan Lovells, and Algest, played a crucial role in supporting the country throughout the debt restructuring process.
This milestone marks a new beginning for Ghana’s economy, paving the way for sustainable growth and development. With its debt restructuring complete, Ghana is now better positioned to attract investors and improve the lives of its citizens.
