Associate Professor of Finance at Andrews University, Williams Kwasi Peprah, says the $2 billion savings the Finance Minister claimed the country would achieve through successful negotiations with creditors is not entirely accurate.
Dr Mohammed Amin Adam announced the completion of Ghana’s debt restructuring programme with its official creditors.
According to the Member of Parliament for Karaga, the government has successfully restructured its debt of $5.1 billion with these creditors, in addition to concluding the restructuring of $13.1 billion with Eurobond holders.
Addressing attendees at a UK Town Hall meeting, Dr Amin Adam highlighted that these efforts have resulted in savings of $8 billion for the country.
“Last two weeks, we concluded negotiations with the official creditors, and we have agreed to restructure 5.1 billion dollars. I am telling you that the government is good in negotiations and of this amount, we are going to make savings of $2 billion.”
“As I speak to you, tomorrow morning, there will be an announcement that we have also concluded our negotiations with the Eurobond Holders of $13.1 billion, and ladies and gentlemen, when we announce it, please read the details. We have negotiated a good deal for Ghana and that is $8 billion,” he said.
However, Dr Adam said the minister’s comments might have been politically motivated. Speaking on Joy FM’s Top Story, he explained that the figures the minister mentioned do not reflect the agreement.
“I am sure he was on a political platform maybe he did not check his figures very well. You know last week they announced that the bilateral creditors have given us debt deferment. Meaning that we will pay fully the $1.5billion. So, I don’t know why he mentioned the savings of $2 billion.
“And then also, he mentioned that there was a savings of $8 billion, I am sure maybe as I have mentioned, he did not check his calculation very well,” he said on June 24.
The Associate Professor said that, after a 37% haircut, the amount left for Ghana to pay on the Eurobond debt is $8.25 billion.
Hence, the savings made can only be determined after the final document is sent to Parliament to review the debt restructuring in the mid-year budget.
He emphasised that “if you really do the Maths very well, the figures do not tally based on what he said on the platform.”
Additionally, he said the country is likely to see some stability in the Ghana cedi by the close of the year, but it is not the case that the cedi would appreciate against the dollar.
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