Smooth servicing of debts already provided for by previous administration –  former Finance Minister

The former Finance Minister, Dr. Mohammed Amin, has stated that the previous New Patriotic Party (NPP) government strategically built buffers in Ghana’s Debt Reserves Accounts to ensure the continuous servicing of the country’s debt obligations.

This follows a directive from President John Mahama to the Finance Minister, Dr Cassiel Ato Forson, to honour the fourth coupon payment to Domestic Debt Exchange Programme (DDEP) bondholders.

The Karaga MP noted that while the current administration is taking credit for the payment, it is important to recognise that the previous NPP government had already put in place financial mechanisms to support these obligations.

“Since the restructuring of the Domestic Debts, the previous NPP government has not defaulted in coupon payments. Buffers were also built in the Debt Reserves Accounts to support upcoming debt service obligations such as the 4th coupon payments,” he stated.

According to him, the NPP administration successfully made three previous coupon payments before leaving office, demonstrating their commitment to meeting Ghana’s debt obligations despite economic challenges.

He detailed the breakdown of these payments, revealing that a total of GH¢17.25 billion was paid in Payment-In-Cash (PIC), while GH¢9.77 billion was paid in Payment-In-Kind (PIK) between August 2023 and December 2024.

“The NPP government paid a total of GH¢17.25 billion in PIC and GH¢9.77 billion in PIK to bondholders. Also, individuals who did not tender their bonds were paid coupons amounting to GH¢515.17 million at various times between 2023 and 2024, in line with the MoU signed between the government and the Coalition of Individual Bondholders,” Dr Amin Adam disclosed.

Providing further details, he explained that the first coupon payment in August 2023 amounted to GH¢8.55 billion, with GH¢5.42 billion paid in cash and GH¢3.13 billion deposited in PIK.

The second payment, made in February 2024, totalled GH¢9.11 billion, comprising GH¢5.85 billion in PIC and GH¢3.27 billion in PIK.

The third payment, in August 2024, saw a total disbursement of GH¢9.35 billion, with GH¢5.98 billion paid in cash and GH¢3.38 billion in PIK.

Dr Amin Adam’s comments suggest that the smooth continuation of these payments is largely due to the fiscal planning and measures put in place by the previous government.

His remarks also raise questions about the extent to which the current administration has contributed to the latest payment, given that reserves were already allocated to sustain debt servicing.

With this context, he implied that while honouring the fourth coupon payment is commendable, the government must acknowledge the groundwork laid by its predecessor.