“IMANI CEO Urges Finance Minister to Invest $2bn Savings from Creditor Negotiations in Economic Growth”
- Ghana's debt restructuring negotiations provide financial relief.
- Domestic debt restructuring reduces rates from 21% to 9%.
- External bilateral debt restructuring saves $2.8 billion.
- Commercial bondholder agreement cancels $4.7 billion of debt.
Franklin Cudjoe, Founding President of IMANI Africa, has urged Finance Minister Dr. Mohammed Amin Adam to invest the $2 billion savings from successful creditor negotiations in economic growth. The savings, equivalent to GHS 10 billion, should be utilized to boost growth and pay for the stayed debt later, Cudjoe advised.
He suggested that part of the savings be kept in a sinking fund to lessen the financial burden from the debt. Cudjoe commended the Finance Minister for doing a great job in his caretaker role but cautioned him to stay focused and avoid fiscal recklessness.
He referenced the economic challenges faced by Ghana, including haircuts, poverty, and financial hardship, and urged the Minister to prioritize growth. President Nana Addo Dankwa Akufo-Addo recently outlined the completion of three major debt restructuring operations, including domestic debt restructuring, external bilateral debt restructuring, and commercial bondholders debt restructuring.
The President noted that the successful negotiations have provided much-needed financial relief and set the stage for a renewed focus on critical infrastructure and development projects. The agreements have provided a cash flow relief of $4.4 billion during the IMF Programme and canceled $4.7 billion of the debt stock.
The domestic debt restructuring achieved a high participation rate of almost 95%, reduced coupon rates from 21% to 9% on average, and extended maturities. The external bilateral debt restructuring resulted in the restructuring of $5.1 billion of Ghana’s debts, providing a cash flow relief of approximately $2.8 billion.
The successful negotiations have paved the way for the IMF’s Executive Board to convene and approve Ghana’s Second Review of the Fund Programme, resulting in a further disbursement of $360 million. The President commended the Ministry of Finance for their efforts in achieving these historic agreements, which have created the financial space needed to resume and complete stalled projects across the country.
