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Ghana extends domestic debt exchange registration deadline

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Ghana has extended the registration deadline for a domestic debt exchange programme to Dec. 30, as it considers making some adjustments while it seeks approval for an IMF debt relief programme, the finance ministry said in a statement overnight on Friday.

“The extension… affords Government of Ghana the opportunity to consider suggestions made by all Stakeholders with the aim of adjusting certain measures,” the ministry said in its statement, without detailing which points had been contentious.

The debt exchange programme will now have an expected settlement date of Jan. 6. The ministry had previously set a deadline of Dec. 19 for domestic bondholders to apply for the debt exchange, with new domestic bonds to be issued on Dec. 23.

“This extension will provide enough time for the necessary consultations and analysis to be completed to meet the expectations of local and foreign institutional bondholders while preserving the integrity of the Debt Sustainability Analysis and the Staff Level Agreement,” the finance ministry said in its Friday statement.

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Under the domestic debt exchange, local bonds will be exchanged for new ones maturing in 2027, 2029, 2032 and 2037, and their annual coupon will be set at 0 percent in 2023, 5 percent in 2024 and 10 percent from 2025 until maturity.

Ghana, once considered a rising star among emerging market economies, is facing a generational debt crisis. Inflation was above 50 percent in November, and the government is spending between 70 percent and 100 percent of its revenue on interest payments.

On Tuesday, Ghana and the International Monetary Fund (IMF) announced a staff-level agreement for a $3 billion relief programme, which Reuters first reported late last week.

A debt sustainability analysis concluded earlier this month that Ghana’s debt burden was unsustainable. A comprehensive debt restructuring, including that of foreign debts, is a prerequisite for Executive Board approval, the IMF said on Tuesday.

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