"Gov't has made significant progress in restoring economic and financial sustainability" -Ofori-Atta

Finance Minister, Ken Ofori-Atta says the Akufo-Addo administration has made significant progress in restoring economic and financial sustainability in the country.

According to him, a proactive stance to restore economic and fiscal sustainability has been adopted.

He said "Government has made significant progress in restoring economic and financial sustainability"

Explaining further, he noted that President Akufo-Addo announced initiation of talks with the IMF on a support package in July.

He also stated that between September 26 to December 1, 2022, a 2nd and 3rd IMF Staff Missions arrived in Accra to hold talks adding that it paved way for the launch of the Domestic Debt Exchange Programme (DDEP) on December 5.

"On February 14, there was a completion of DDEP for Government of Ghana (GoG) notes and bonds, ESLA and Daakye bonds"

"In April, spring meetings on the continuation of technical meetings with the IMF were held likewise preliminary and technical discussions with Bondholders Committee Advisors and Bilateral Creditors Secretariat and Technical Teams were also held this year"

The Finance Minister also noted that Ghana and the International Monetary Fund (IMF) reached a Staff-Level Agreement in December 2022.

He explained that the programme duration intends to look at a three years span beginning 2023 and ending in 2026.

Ken Ofori-Atta noted that $3Billion USD is the amount aimed at being granted with an extended credit facility being its facility type.

Ken Ofori-Atta stressed that following the Staff-Level Agreement, gov't seeks to undertake ambitious growth-friendly and lasting fiscal adjustments and also restore public debt sustainability.

"We will protect the vulnerable, preserve the external buffers, bolster the efficiency of monetary policy, preserve financial stability, improve the governance and transparency of the public sector"

"We will foster entrepreneurship and growth and also enhance external competitivity and attractivity"

He revealed that the Authorities are committed to a bold reform agenda supported by the IMF.

He hinted that the government is engaged in wide-ranging policies reforms, structured under the Post-Covid Programme for Economic Growth (PC-PEG).

On the fiscal and debt sustainability, Ken Ofori-Atta explained that it intends to undertake fiscal adjustment with revenue and expenditure measures to improve debt sustainability and restore macroeconomic stability.

"We seek to address structural bottlenecks including SOE contingent liabilities, commitment controls, arrears accumulation and domestic revenue mobilisation.

On the monetary and financial sector reforms, he stressed that it will rebuild reserve buffers, mobilise external concessional financing from multilateral and bilateral partners and suspend external debt service payments.

On social protection and structural reforms he said "there will be the safeguarding of social protection programmes and ensuring the burden of adjustments is fairly distributed.

He, however, mentioned that the Authorities have already taken decisive steps to restore macroeconomic stability and kickstart growth.

The Sector Minister noted that in February 2023, Ghana successfully completed the first pillar of the Domestic Debt Exchange Programme (DDEP)

"The Government of Ghana requested an effort of an unprecedented magnitude from its local bondholders in the form of voluntary exchange and reached a very high level of participation"

Touching on the outcome of the DDEP, he cited 19.1% coupon with an average maturity of 3.8 years as old bonds while 9.1%, of which only 5% paid in cash between 2023-2024 with average maturity of 8.3 years as new bonds.

He stated that there was an 85% participation adding that perimeters looked at Treasury Bonds, ESLA Bonds, Daakye Bonds excluding holdings by Pension Funds.

It is emerging that the February 2023 DDEP will produce debt service savings of GHc34Billion over 2023.

It is emerging that the restructuring of the external debt is necessary to restore debt sustainability and ensure the full financing of the programme.

Thinknewsonline.com is learning that an external debt treatment is required to restore debt sustainability and ensure the full financing of the programme.

The Finance Minister stressed that the external debt treatment should be consistent with reaching IMF/WB LIC DSF thresholds by 2028 and ensure a return to adequate levels of international reserves.

The Debt Treatment is expected to generate sufficient external cashflow relief to ensure the full financing of the IMF programme.

The Minister says he is confident that two-thirds of the $30.5Billion USD external debt are expected to be included in the External Debt Restructuring Perimeter.

He noted that the external debt restructuring exercise will aim at reaching the IMF/WB LIC DSF targets.

Story by: Joshua Kwabena Smith