Ghana to issue new restructured bond by October 9

Ghana is making strategic moves to enhance its economic stability by boosting the income of cocoa farmers and restructuring its international bonds. The country has set October 9th as the date to issue new international bonds as part of its plan to restructure $13 billion of its international bonds. Bondholders have until September 30th to accept the offer. In a bid to address smuggling and increase farmers' incomes, Ghana has raised the fixed farmgate price paid to cocoa farmers by nearly 45 percent. This increase, from around 33,000 CD's to over 48,000 CD's (approximately $3,070), aims to deter farmers from smuggling their produce to neighboring countries. The move is significant as it aligns with efforts to prevent cocoa trafficking rings that have become more sophisticated and advanced in recent years. By ensuring that farmers receive fair compensation, Ghana hopes to stabilize production levels and curb smuggling activities. The country's collaboration with Ivory Coast in coordinating farm prices signals a united front against smuggling. The timely adjustment in farmgate prices also accounts for the pressure on the currency, making it a multifaceted strategy to boost the cocoa industry. Karen Kwarteng, Head of Global Market Sales at Standard Bank, emphasized the importance of getting the price right to discourage smuggling. The coordinated efforts between Ghana and Ivory Coast bode well for aligning farm prices and reducing the disparity between the two countries. The swift access to funding through a new model by Cocoa Board, along with setting aside funds for interest payments, indicates a proactive approach to supporting cocoa farmers and sustaining production levels. Kwarteng highlighted the need for periodic reviews of farmgate prices to maintain production levels and ensure farmer welfare. As Ghana progresses with the restructuring of its international bonds, investor confidence is on the rise. Both groups of bondholders seem receptive to the terms offered, with options that include a haircut on principal or adjustments in coupon interest rates. This milestone in Ghana's debt restructuring process not only demonstrates the country's commitment to financial stability but also aligns with the objectives of the Extended Credit Facility program set to commence in 2022. The agreement with bondholders and the upcoming IMF review further underscore Ghana's determination to meet its financial obligations and enhance economic resilience. In conclusion, Ghana's initiatives to support cocoa farmers and restructure its international bonds reflect a proactive approach to economic governance. By addressing key challenges in the cocoa sector and engaging with international investors for debt restructuring, Ghana is positioning itself for sustainable growth and stability in the global financial landscape.