The government's recently announced debt swap scheme, which aims to ensure the sustainability of Ghana's public debt, has not surprised financial analyst Toma Imihere.
Given the severity of the nation's debt difficulties, the current predicament was something he had long anticipated.
The International Monetary Fund (IMF) has received a request from Ghana for a $3 billion assistance plan.
Due to concerns with creditworthiness, the nation has also been barred from the global market, requiring the government to resort to debt restructuring in order to reduce the amount owing to levels that are manageable and fulfill IMF lending criteria.
"I anticipated that would occur. It had to happen. In this form, it has long been inescapable. By comparing debt to GDP instead of revenue to debt servicing needs, we had been measuring our indebtedness incorrectly, according to Toma Imihere.
Domestic bondholders will be required to exchange their current securities for new ones as of the proposed debt restructuring's start date in 2023.
On December 1, 2022, existing domestic bonds will be swapped for a group of four new bonds with maturities in 2027, 2029, 2032, and 2037.
All of these new bonds will have an annual coupon that is slated to be 0% in 2023, 5% in 2024, and 10% in 2025 until maturity.
However, this will not have an impact on holders of Treasury bills or certain bonds.
In addition, Finance Minister Ken Ofori-Atta has guaranteed that bonds' principal would not be reduced.
"It was obvious that Ghana would ultimately have problems since the cost of servicing the debt was exceeding our income, which is why we are now forced to resort to this position. It was like a pyramid system getting money from foreigners which goes too much into debt servicing, especially for the FX portion of our domestic debt. Since the beginning of the HIPC program, we have been entering the global market, but we were aware that eventually our level of debt would prevent us from doing so.