Debt servicing consumes 70% of tax revenue; almost of all govt’s funds – Ofori-Atta

The Finance Minister Ken Ofori-Atta has justified the introduction of the debt exchange programme as announced in the 2023 budget statement.

He said the programme has become necessary because of the enormous challenges with debt servicing.

Launching the programme in Accra on Monday December 5, he revealed that debt servicing is consuming “almost of government’s revenue and also 70 per cent of tax revenue.”

“Which is why we are announcing this to restore our capacity to service debt,” he stressed.

Under the debt exchange programme, he said, ” domestic bond holders will be asked to exchange their instruments for new ones.”

He added “Existing domestic bonds as of 1st December will be exchanged for a set of four new bonds maturing in 2027, 2029, and 2037.”

The annual coupons on all of these bonds will be set at 0 % in 2023, 5% in 2024 and 10% from 2025 until maturity.

“Coupon payments will be semi annual ‘ he stressed.