Governor of the Bank of Ghana, Dr Ernest Addison, says the Central Bank has enough foreign reserves to make payment for the upcoming $478m in debt service to the country’s Eurobond holders.
Dr Addison addressing the media at the 119th Monetary Policy Committee (MPC) press briefing on Friday, July 26, 2024, noted the Central Bank has made provisions for dollar-denominated debt service payments this year.
“We are very much aware of the payments that are upcoming, if you look at the cash flow projections you would see that provisions have been made for this particular payment.
“So yes, we have built up reserves to meet some of these lumpy payments in the outlook,” quipped the Governor.
Ghana’s gross international reserves per recent data provided by the Bank of Ghana in the 2024 July Summary of Economic and Financial Data stands at $6.86bn, an increase from the $5.34bn reserves recorded same period last year.
Ghana is expected to start honouring its debt service obligations to Eurobond holders when it signs the final agreement with the bondholders on the newly restructured bonds.
According to IC Africa Research, Ghana is expected to make debt service payments between $600m and $800m this year.
Ghana over a month ago reached an agreement with Eurobond investors to restructure approximately $13 billion of debt, terms of the deal involved bondholders accepting a nominal 37% haircut on their investments.
The 37% haircut in investments by the Eurobond holders is expected to result in some savings of $6bn for the country.
Before that, the country had also successfully reached an agreement with the Official Creditor Committee to restructure some $5.1bn in external debt with some savings of $2bn made from the restructured debt.
According to the Minister for Finance, Dr Mohammed Amin Adam, cumulative savings made from the country’s restructured external debts amount to some $8bn.
Norvanreports