Debt service consumes 70% of tax revenue — Ofori-Atta

Finance Minister Ken Ofori-Atta, says the government of Ghana spends 70% of tax revenue on servicing debt.

Mr. Ofori-Atta gave an explanation of the rationale for the introduction of the Domestic Debt Exchange, stating that the difficulties with debt payment made the action necessary.

Addressing journalists at a meeting on Monday, he said “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.”

According to Mr. Ofori-Atta, domestic bondholders will be asked to exchange their instruments for new ones

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

All of these bonds will have yearly coupons of 0% in 2023, 5% in 2024, and 10% from 2025 until maturity.

As a result, he requested bondholders to back the government’s efforts to revitalise the economy.

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