No debt restructuring with local contractors – Finance Ministry

THE Ministry of Finance has strongly refuted claims circulating in the media that the government is planning to engage in debt restructuring with private banks and local contractors. The ministry clarified that these reports are unfounded and categorically denied any ongoing or future discussions regarding such a restructuring.

According to an official statement released today, the Ministry emphasized that the domestic debt restructuring program, which commenced in December 2022 and concluded in October 2023, did not involve any obligations related to local contractors.

The ministry said the misunderstanding seems to have arisen from a response given during a Monthly Press Briefing on the Economy held on 29th August 2024, which touched on external commercial debt restructuring. The Ministry noted that this response was misinterpreted by some media outlets to suggest that local contractors would also be affected by restructuring.

Clarifying the situation, the Ministry explained that debt restructuring applies to loans and bonds, not payment claims made by domestic contractors. “Domestic contractors’ liabilities are payment claims, not loans or bonds, and do not fall under the category of obligations eligible for restructuring,” the statement read.

Furthermore, the Ministry asserted that it has never engaged or invited local contractors for any debt restructuring discussions. This has also been confirmed by contractors during a recent interview with JoyNews, dispelling any confusion about their involvement in such processes.

The statement highlighted that the completed Domestic Debt Exchange Programme (DDEP) exclusively covered domestic bonds held by the Central Bank, Pension Funds, and retail debt investors, with no provisions for restructuring payments owed to contractors.

In terms of external debt restructuring, the Ministry has made significant strides, including, completing a Memorandum of Understanding with the Official Creditor Committee under the G20 Common Framework; Launching a Consent and Exchange Solicitation process for Eurobond debt; Beginning engagements with external commercial creditors to reach a favorable outcome in the coming weeks.

The Ministry urged the public to disregard the false reports about contractor debt restructuring and expressed gratitude for the support shown during the complex process of managing Ghana’s debt restructuring initiatives.

The government launched the Domestic Debt Exchange Programme in December 2022 as part of broader efforts to address the country’s rising debt burden. The program sought to restructure domestic bonds to bring Ghana’s debt to more sustainable levels. The DDEP officially concluded in October 2023, focusing only on bonds held by local investors such as the Central Bank and Pension Funds. The Ministry reiterated that local contractors’ payments remain unaffected by any restructuring plans and assured the public that external debt negotiations are progressing steadily.