Relief for bondholders: Govt to release 3rd tranche of GH¢6.1bn next month
The government is on track to make the third coupon payment of GH¢6.1 billion to bondholders next month.
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This was after it successfully honoured two coupon payments, with the second payment of about GH¢5.9 billion in February, this year.
The timely payments of these coupons, it said, would improve investor confidence in the domestic market and bolster the overall economy.
The Minister of Finance, Dr Mohammed Amin Adam, disclosed this on Tuesday when he laid before Parliament, the Mid-Year Fiscal Review.
“Mr Speaker, I am pleased to report that the government has made substantial progress since the completion of the Domestic Debt Exchange Programme (DDEP) in September 2023,” he said as he gave an update on the Domestic Debt Exchange Programme (DDEP).
Analysts have described the promptness of the government in redeeming its pledge to domestic investors as crucial to building confidence.
For instance, the Domestic Financing of its total revenues and grants will amount to GH¢38.9 billion (3.8% of revised GDP), representing 71.9 per cent of the total financing for 2024.
This is expected to be sourced from the issuances of debt at the short end of the domestic market and inflows from Ghana Petroleum Funds.
Revenue/Grants
“Mr Speaker, Total Revenue and Grants have been revised upward by 0.5 per cent to GH¢177.2 billion (17.4% of GDP) in 2024, from the 2024 Budget target of GH¢176.4 billion (16.8% of GDP), largely reflecting increase in Non-Oil Non-Tax Revenue which has been increased from GH¢14.8 billion (1.4% of GDP) to GH¢15.6 billion (1.5% of GDP) to reflect dividends from interest accrued on the ESLA accounts,” Dr Amin Adam said as he mentioned details of the government’s revised targets.
He said total expenditure (commitment) had been revised downward by 2.1 per cent, to GH¢219.7 billion (21.5% of GDP) from the original budget projection of GH¢226.7 billion (21.6% of GDP).
This revision is largely on the back of Interest Payments which have been revised downwards by GH¢7.9 billion to reflect the impact of the external debt restructuring on external interest payments.
The overall balance on a commitment basis has been revised from a deficit of GH¢50.3 billion (4.8% of GDP) to a deficit of GH¢42.5 billion (4.2% of GDP). The primary balance on a commitment basis is maintained at a surplus of 0.5% of GDP.
The cash deficit of GH¢54.1 billion (5.3% of GDP) is expected to be financed from both foreign and domestic sources.
The Net Foreign financing will amount to GH¢15.2 billion (1.5% of GDP) representing 28.1 per cent of the total financing for 2024.
Dr Amin Adam added that foreign financing would include disbursements from the second and third tranche of the IMF ECF programme and World Bank Development Policy Operation (DPO) funding.