Government has not added new debt – Bawumia

Dr Mahamadu Bawumia has pushed hard against claims that the Akufo-Addo government has added $2.5 billion to the national debt stock when it recently issued a bond.

Describing the transaction to raise $2.25 billion “as the deal of the year,” the vice president slammed government critics, especially members of the NDC economic team, of lacking a basic understanding of the transaction.

Speaking at a Town Hall meeting organised by Accra-based Joy FM, Bawumia said the transaction is a process of re-profiling the country’s debt which is around GHC122 billion.

He said: “We began the process of re-profiling the public debt. As you know the public debt ended at GHC122 billion in 2016. And we as a matter of strategy began re-profiling our debt. This means we are replacing more expensive debt with less expensive debt. Short-term debt with longer-term debt.

“And so you saw last week Friday or so Ghana issued a bond essentially to do this re-profiling and in that contest, we raised some $2.25 billion investment that came in to buy this cedi denominated bond. There was a cedi bond which was issued for 15 years tenure and that brought in $2.25 billion

“But what was particularly remarkable about this particular transaction and I think for me, it is the deal of the year so far, we’ve been able to re-profile our debt, get more foreign exchange without increasing our debt. That is quite remarkable.
“Many people didn’t quite understand the transaction and they had thought that we have gone to borrow $2 billion to added to Ghana’s debt. No, we are actually replacing more expensive debt with less expensive debt, elongating it and making it better for this country.

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