By Cooper Inveen
ACCRA (Reuters) -Ghana has prolonged the registration deadline for a home debt change programme to Dec. 30, because it considers making some changes whereas it seeks approval for an IMF debt reduction programme, the finance ministry mentioned in an announcement in a single day on Friday.
“The extension… affords Authorities of Ghana the chance to think about strategies made by all Stakeholders with the purpose of adjusting sure measures,” the ministry mentioned in its assertion, with out detailing which factors had been contentious.
The debt change programme will now have an anticipated settlement date of Jan. 6. The ministry had beforehand set a deadline of Dec. 19 for home bondholders to use for the debt change, with new home bonds to be issued on Dec. 23.
Ghana, as soon as thought-about a rising star amongst rising market economies, is dealing with a generational debt disaster. Inflation was above 50% in November, and the federal government is spending between 70% and 100% of its income on curiosity funds.
On Tuesday, Ghana and the Worldwide Financial Fund introduced a staff-level settlement for a $3 billion reduction programme, which Reuters first reported late final week.
A debt sustainability evaluation concluded earlier this month that Ghana’s debt burden was unsustainable. A complete debt restructuring, together with that of overseas money owed, is a prerequisite for Government Board approval, the IMF mentioned on Tuesday.
“This extension will present sufficient time for the mandatory consultations and evaluation to be accomplished to fulfill the expectations of native and overseas institutional bondholders whereas preserving the integrity of the Debt Sustainability Evaluation and the Employees Degree Settlement,” the finance ministry mentioned in its Friday assertion.
Below the home debt change, native bonds will likely be exchanged for brand spanking new ones maturing in 2027, 2029, 2032 and 2037, and their annual coupon will likely be set at 0% in 2023, 5% in 2024 and 10% from 2025 till maturity.