80% of debt swap needed to get IMF deal - Ken Ofori-Atta
The government says it is optimistic of achieving 80 percent of the bond debt swap under the Domestic Debt Exchange Programme by January 31, 2023.
An 80 per cent participation by individual bond holders, according to the Finance Minister, Ken Ofori-Atta would help the government to get into the perimeters of 55 percent debt to Gross Domestic Product (GDP), essential to achieve an IMF deal.
The government is seeking a US$3billion IMF bailout to balance its books as its debts have over swallowed its income.
Speaking to the media after a meeting with individual bond holders on Wednesday evening, (Jan 18), Mr Ofori-Atta said, "this is a voluntary exercise and we made some changes to extend it to January 31st to give us time to incorporate all ideas that has come up. We anticipate 80 per cent participation to ensure that we are within the parameters.”
IMF Bailout under threat
Government is racing against time to conclude a US$3 billion facility that is hoped to stabilise the economy which is currently choked with debts, with total debt currently at GH¢467 billion as of December 2022.
Analysts have warned that if the deadline for all creditors to sign up the government’s DDE programme was not met, it would have dire consequences on the economy. Individual bond holders have rejected government’s overtures to be roped onto the DDE programme and have threatened legal action which could put the whole programme into jeopardy.
Already, the currency speculators are beginning to gain a head-start with regard to the country’s cedi. It has shown signs of picking up the pace again with regard to depreciation. At the turn of the year, the cedi was trading at GH¢7.9 to US$1. However, as of yesterday, it had reached over GH¢9 to the US$1 tumbling almost 20 per cent since December.
This evening, the government reached an agreement with individual bondholders to have a technical team to review its petition on the Domestic Debt Exchange Programme (DDEP).
At a closed door meeting with the leadership of the Individual Bondholders Forum, the Minister of Finance, Ken Ofori-Atta said the government was opened to discussing alternative means of making the DDEP successful.