Ghana’s dollar bonds fell nearly 1.5 cents following Finance Minister Cassiel Ato Baah Forson’s announcement of spending cuts described as “shock therapy.” The 2035 bonds hit an 8-week low but slightly recovered. The government faces substantial external debt service costs in the coming years after restructuring $13 billion in international bonds post-default in 2022.
Ghana’s dollar-denominated bonds experienced a decline of nearly 1.5 cents following the announcement by Finance Minister Cassiel Ato Baah Forson regarding necessary “shock therapy” spending cuts. The bonds, particularly those maturing in 2035, reached their lowest point in eight weeks, although they recovered slightly to reflect a loss of 1.15 cents, as indicated by Tradweb data, bidding at 70.61 cents on the dollar.
During his first budget presentation under President John Dramani Mahama, Minister Forson highlighted the significant external debt service costs that the government is expected to encounter over the forthcoming four years. The announcement follows Ghana’s completion of a restructuring process for $13 billion worth of international bonds in October, after experiencing a challenging debt default in 2022.
In summary, Ghana’s dollar bonds have faced a notable decline following the government’s announcement of drastic spending cuts described as “shock therapy.” This situation highlights the ongoing financial challenges the country is facing, compounded by external debt service obligations and recent restructuring efforts after a debt default.
Original Source: www.tradingview.com
