Time to engage external creditors on debt levels
Yesterday, we reported that the government last week received GH¢83 billion of its existing domestic cedi denominated bonds for new ones under the domestic debt exchange programme (DDEP) that ended last Friday.
The amount of outstanding principal bonds tendered under the programme was equivalent to about 85 per cent of the domestic debts made available under the deal.
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The successful conclusion of the DDEP is positive for the country as it paves the way for the government to open discussions with external creditors on a similar debt treatment.
This is needed to secure a sustainable debt ratio that can earn the country US$3-billion support from the International Monetary Fund (IMF) to stabilise the economy.
The Daily Graphic commends all the parties involved for their tireless efforts to achieve this milestone.
Indeed, the investors that participated put the national interest first, ironed out the differences and came to an amicable conclusion that moved the country closer to the much-needed IMF deal.
We are particularly happy to note that the government and the country at large met its expectation on the transaction, as this makes discussions with the fund towards securing the final approval easier.
While the discussions between the Ministry of Finance and the pensioner bondholders continue, there is no gainsaying that the experiences from the back and forth on the DDEP will be crucial in approaching the external debt treatment in the coming days.
In that regard, we urge that the government works to make that process smoother and quicker by engaging in exhaustive discussion and negotiations with key stakeholders.
This will allow the government to construct a debt treatment package that satisfies the varied interest groups that currently hold the country’s commercial debts to avoid disagreements and delays similar to what happened during the DDEP.
It is worthy to note that the diplomatic manoeuvres at the national level are already ongoing, with President Nana Addo Dankwa Akufo-Addo earlier this month asking Germany to encourage China to support the country’s debt restructuring efforts.
As the President said, it was critical that the Paris Club swiftly established, with the participation of other official creditors, a creditors committee to support the efforts that would enable Ghana to restore economic growth.
As an informal group of official creditors working to find coordinated and sustainable solutions to debt payment difficulties facing countries, the club has a bigger say in the success or otherwise of Ghana’s external debt treatment and the quicker the government got it to start work, the better for the country.
But of significance to that programme is the posture of China.
Although a significant lender to Ghana, the Asian giant is not a member of the Paris Club and will, therefore, not be impacted by any decisions taken at that level.
But given Ghana’s cordial relations with China over the years and the seeming willingness of the world, including the IMF, the World Bank Group and key creditor nations such as Germany, Japan, the United States of America, the United Kingdom and France, to aid the country restore its macroeconomic indicators, it is expected that China will come onboard any decision that the country will reach with its creditor nations as far as the debt restructuring is concerned.
The Daily Graphic believes that the successful conclusion of the DDEP shows the level to which the citizens and local institutions are willing to sacrifice their comfort to restore macroeconomic stability.
It is now the turn of our global friends to join us in this trying time of ours to steady our ship to calm the waters.
