Government re-profiling external debt with G20 members – Ofori-Atta

October 1, 2023

The Finance Minister, has announced that the government is planning to re-profile Ghana's debt with the G20 developing countries rather than seek an outright cancellation.

The Paris Club members have already agreed to form a creditor committee to discuss debt restructuring and possible debt cancellation for Ghana.

The government has come under some criticism over its request to the Paris Club of International Creditors for debt cancellation.

Some analysts have argued that the request could encourage the government to engage in reckless borrowing if it is granted.

Mr Ofori-Atta disagreed stating that the Paris Club members are always open to debt re-profiling.

“Paris Club is not necessarily debt cancellation but re-profiling of the debt. Basically, we are now talking about the float to look at the interest rate and the maturity period so that we can ensure that it does not exert any undue influence on us”.

He explained that the issue of debt relief and debt cancellation is a second item that the government would have to confront with relevant stakeholders.

Providing some more information, he pointed out that the government is dealing with a twin challenge where it is engaging domestic creditors as well as international creditors.

“We have the debt domestic programme. The plan is to reduce our interest burdens and move towards 25%. You have your Paris Club and other countries programme which helps smoothen out the needs for payment”, he said.

 Mr Ofori-Atta added that it is important to work at attaining a sustainable debt reduction – both domestic and external – to propel the country towards economic expansion.

“A combination of all of that leads us to the target so that's what we are talking about. 55% debt to GDP and 18% debt service to revenue”, he stressed.

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