Opposition lawmakers want Ghana’s domestic debt exchange program to face parliamentary scrutiny, a new hurdle that could delay the country’s goal of accessing a bailout from the International Monetary Fund by the end of next month.
(Bloomberg) — Opposition lawmakers want Ghana’s domestic debt exchange program to face parliamentary scrutiny, a new hurdle that could delay the country’s goal of accessing a bailout from the International Monetary Fund by the end of next month.
Members of the National Democratic Congress in Ghana’s hung parliament plan to file a motion Friday compelling Finance Minister Ken Ofori-Atta to present the terms of the debt swap for approval, NDC lawmaker Mahama Ayariga told Accra-based broadcaster Citi FM Friday.
The government just completed the first part of a domestic debt exchange, with investors turning in 83 billion cedi ($6.7 billion) of holdings for new securities, covering 64% of its local debt under reorganization. Local banks, insurers, and individual bondholders are among investor groups which swapped their old bonds.
“Changing the terms and conditions of the bonds amounts to contracting new loans with new legal arrangements and must be brought to parliament for approval,” said Ayariga, who’s a member of the chamber’s constitutional committee.
“Whatever the finance minister has negotiated with pensioners, bondholders, banks and whoever cannot come into effect until he has brought them to parliament for consideration and approval.”
Ghana, which has been priced out of international capital markets since last year, needs to restructure its debt to qualify for a $3 billion IMF bailout program.
The country, which unilaterally suspended payments on eurobonds, commercial term loans and most bilateral debt in December, needs assurances from investors to show the IMF it is in good standing to bring debt to a sustainable level. It aims to reduce the ratio of debt to gross domestic product to 55% by 2028 from an IMF estimate of 105% of GDP in 2022.
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