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ACCRA, Nov 24 (Reuters) – Ghana’s government is considering a 30% ‘haircut’ on foreign bonds, and the suspension of interest rate payments to domestic bondholders in 2023 as part of debt restructuring efforts, deputy finance minister John Kumah said on private radio station JoyFM on Thursday.
The full details of the debt exchange program will be announced by the end of November, he said, noting that there would be no haircut for domestic bonds.
“The foreign will take haircut, that is where the haircut comes in. There, we are negotiating to go into their principal, plus suspension of their interest at NPV (net present value) level. We are negotiating on principal of up to 30%,” Kumah said.
He added that restructuring would enable the government to conclude a support deal with the IMF, and “build buffers” to be able to repay bondholders once it emerges from the crisis in a couple of years.
Kumah told Reuters the measures he referred to on JoyFM were “not conclusive” and only proposals “at this stage”.
“It’s true that we have a debt exchange program preparing to engage investors with various proposals, no decisions [on percentages] yet,” he said via WhatsApp message.
Ghana is negotiating a relief package with the International Monetary Fund as the cocoa, gold, and oil-producing nation faces its worst economic crisis in a generation.
Finance Minister Ken Ofori-Atta announced a series of measures earlier on Thursday to cut expenditure and boost revenue in a bid to tackle spiralling debt.
Kumah was speaking on JoyFM as part of a live debate with opposition spokesperson Cassiel Ato Forson.
(Reporting by Christian Akorlie and Cooper Inveen Writing by Sofia Christensen and Bate Felix Editing by Sandra Maler Editing by Sandra Maler)
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