Ghana’s sovereign dollar bonds experienced a significant drop of nearly 3 cents in the dollar on Tuesday. The decline followed the Ghanaian government’s presentation of potential debt rework scenarios to its investors, which included a haircut of between 30-40% on the principal amount.
The impact of this debt overhaul was most pronounced on the longer-dated bonds, with the 2061 bonds being hit the hardest. These bonds plummeted as much as 2.9 cents to the dollar, reaching a low of 38.9 cents. This marks the lowest level observed since mid-July, according to data from Tradeweb, a leading financial information platform.
Ghana’s fiscal policies and debt management strategies are under scrutiny as the government seeks to strike a balance between addressing its debt burdens and ensuring sustainable economic growth.
Investors and analysts are closely monitoring the situation as the Ghanaian government grapples with the challenges of its debt restructuring efforts. The proposed haircut on principal has raised concerns about the country’s ability to service its external debt obligations and maintain