Ghana’s eurobonds fell sharply on Tuesday after Finance Minister Cassiel Ato Forson warned that the country’s energy debt could double by 2027 without urgent intervention.
By the numbers
- 2035 dollar bonds fell 1.1% to 73.3 cents on the dollar, the lowest in a month.
- 2030 bonds dropped 0.9% to 77.83 cents on the dollar.
- Ghana’s energy debt stood at $4.5 billion at the end of 2024 but could hit $9 billion by 2027.
Why it matters
Ghana, still recovering from its 2022 debt default, recently completed a major restructuring of its $47.5 billion public debt but faces mounting financial strain from its struggling energy sector.
What’s driving energy debt?
- High losses: The state-run Electricity Company of Ghana (ECG) only accounts for 62% of the energy it buys.
- Lack of competition: The power generation sector remains concentrated.
- Underpriced tariffs: Electricity rates are set below production costs.
The bigger picture
The warning came at a national economic dialogue in Accra, hosted by President John Mahama, who took office in December on promises of economic reform.
- Ghana is still negotiating with 60 international banks to restructure $2.7 billion in loans.
- Mahama has pledged to cut spending, refine the IMF’s $3 billion program, and restore investor confidence in the world’s second-largest cocoa producer.
Source: Bloomberg
