Ghana's national debt of $7 billion has been reduced by half

The government of Ghana has paid off half of its $7 billion debt to the nation's central bank and replaced the remaining amount with a 15-year bond with a lower interest rate.The American news organization Reuters reported this, citing three persons who had firsthand knowledge of the transaction. The most recent move is a part of the nation's endeavor to restructure its domestic debt, which is required in order to qualify for the next payment of a $3 billion bailout loan from the International Monetary Fund (IMF). Ghana wants to focus right now on negotiations with foreign creditors. Ghana's first phase of domestic debt restructuring was completed in February when new bonds were exchanged for local currency bonds owned by 85% of qualified holders. The Ghanaian government is now restructuring the domestic debt of 123 billion Ghana cedis, which includes debt owing to independent power producers, the central bank, domestic U.S. dollar bonds, cocoa bills, and pension funds. “The [central bank] had wanted to be excluded and they pushed really hard but there was no agreement,” a senior government official said. “The IMF also made it clear that we cannot achieve our target on debt restructuring if we do not include the [central bank debt The official declared that the non-tradable central bank debt, which included 15-year-old COVID-19 bonds, overdrafts to the government and the cocoa marketing board, and other legacy debt, had been eliminated. The majority of those debt obligations have been making interest payments at the current central bank-set rate of 30%. Ghana, which defaulted on the majority of its foreign debt in December, proposes to reduce its international debt payments by $10.5 billion over the next three years in order to deal with its worst economic crisis in a century. A central bank source claims that the bank's record loss from the debt restructuring was around 50 billion cedis.