Ghana’s government has announced plans to honour a crucial US$346 million coupon payment to Eurobond holders today, January 3, 2025, which translates to approximately GH¢5.05 billion at the current exchange rate of GH¢14.6 = US$1.
President Nana Addo Dankwa Akufo-Addo disclosed the payment details during his final State of the Nation Address to Parliament, emphasizing the importance of maintaining the country’s creditworthiness and rebuilding investor trust.
Akufo-Addo assured lawmakers that his administration is committed to avoiding debt defaults, which he stressed could negatively impact Ghana’s standing in the international financial community. “We cannot afford to default on our debt repayments,” he stated, reinforcing the government’s resolve to meet its financial obligations.
This coupon payment, which is part of Ghana’s ongoing efforts to stabilize its fiscal position, has raised concerns about the pressure on the cedi in the early months of 2025. The payment follows a series of fiscal moves to manage the country’s debt obligations, including the approval of GH¢68.13 billion in Expenditure in Advance of Appropriation by Finance Minister Dr. Mohammed Amin Adam on January 2, 2025. This expenditure includes GH¢20.69 billion allocated for interest payments, with energy sector payments making up a significant portion of the remainder.
In the broader context of Ghana’s fiscal and debt management, the government resumed servicing its Eurobond debt in October 2024, after completing a major restructuring program with bondholders. Over US$520 million in coupon payments were made, including US$120 million in consent fees aimed at incentivizing participation in the debt exchange process. The success of the Eurobond restructuring, which involved US$13 billion in debt and achieved a 98% participation rate, was a key milestone in the government’s effort to enhance debt sustainability.
The government’s restructuring efforts have also included the issuance of new Eurobonds, valued at approximately US$9.4 billion, in exchange for existing restructured bonds. This process was part of a broader effort under the International Monetary Fund (IMF) programme, which secured debt service relief of US$4.3 billion between 2023 and 2026. Additionally, interest rates on the Eurobonds were reduced from over 8% to less than 5%.
As a result of these initiatives, Ghana has made significant strides in reducing its debt stock, with the public debt-to-GDP ratio improving from 79.2% in September 2024 to 74.6% in October 2024. The Finance Ministry has also noted that the reduction in the face value of the Eurobonds has positively impacted the country’s overall debt profile.
On the external front, data from the Bank of Ghana shows a stronger external position for the country, supported by a higher current account surplus and improved financial inflows. The current account surplus surged to US$2.2 billion in the first nine months of 2024, driven by increased gold and oil exports and robust remittance inflows. In parallel, Ghana saw a reduction in net outflows in the capital and financial account, contributing to a solid balance of payments position.
As a result of these positive developments, Ghana’s gross international reserves grew to US$7.92 billion by the end of November 2024, up from US$7.83 billion in September, providing the country with a strong buffer equivalent to 3.5 months of import cover.
Despite these gains, the ongoing challenges of fiscal pressure and debt servicing continue to dominate Ghana’s economic landscape. The government remains committed to addressing these challenges through strategic reforms and debt management efforts, with a focus on long-term economic stability.
