Mid-Year Budget Review: Govt pays GHS 12 billion to bondholders

In a move to stabilize Ghana’s economy and restore investor confidence, the government has paid GHS 12 billion to bondholders under the Domestic Debt Exchange Programme. This was a key highlight in the mid-year budget review presented by the Minister for Finance, Dr. Mohammed Amin Adam, on Tuesday, July 23, 2024.

Addressing Parliament, Dr. Adam emphasized the government’s commitment to fulfilling its financial obligations and ensuring economic stability.

“The payment of GHS 12 billion to bondholders marks a critical step in our efforts to restore confidence in the financial markets and stabilize the economy,” stated Dr. Adam. “This payment is a testament to our commitment to fiscal discipline and prudent financial management.”

The Finance Minister detailed how this payment aligns with the broader strategy of economic recovery and growth. The Domestic Debt Exchange Programme, which was introduced to manage and restructure the country’s debt, has been pivotal in achieving these goals. “Through this programme, we have not only managed to honour our commitments to bondholders but also created a more sustainable debt profile for the nation,” Dr. Adam explained.

This financial manoeuvre is part of a broader set of measures aimed at improving the macroeconomic environment. Dr. Adam highlighted that the government has also made significant strides in stabilizing inflation and the exchange rate. “Since 2022, inflation has dropped by 31 percentage points, and the exchange rate has shown signs of stabilization. These are critical indicators of our economic resilience and recovery,” he noted.

Furthermore, Dr. Adam announced that Ghana’s international reserves have increased to 3.1 months of import cover, providing a stronger buffer against external shocks. This improvement is attributed to effective fiscal management and strategic negotiations with international partners, including the International Monetary Fund (IMF) and the Paris Club.

The mid-year budget review also underscored the government’s substantial investments in social programmes and infrastructure. Over GHS 5.4 billion has been disbursed for various social programs, including the Livelihood Empowerment Against Poverty (LEAP) initiative, the School Feeding Programme, and the National Health Insurance Scheme (NHIS). These programs are essential in supporting the most vulnerable segments of society.

In addition, nearly GHS 10 billion has been invested in the road sector since January 2024. Key projects include expanding the Komfo Anokye Teaching Hospital, rehabilitating the Ofankor-Nsawam Road, and ongoing investments in water and sanitation infrastructure.

Education remains a priority for the government, with substantial funding allocated to the Free SHS programme. In the first half of 2024, GHS 1.5 billion was invested in the Free SHS programme, ensuring that the youth have access to quality education. “Investing in education is investing in the future of our nation. We are committed to building a skilled and educated workforce,” Dr. Adam stated.

The government has also launched a GHS 8.2 billion programme to boost small and medium-sized enterprises (SMEs), recognizing their critical role in job creation and economic development. This initiative aims to provide financial support and resources to local businesses, fostering innovation and entrepreneurship.

Dr. Adam also discussed the progress made in the digitalization agenda, with a GHS 135 million investment in the National Identification Programme. This initiative is crucial for improving governance and service delivery, ensuring that every Ghanaian can access essential services efficiently.