The Government of Ghana has finalized a payment of GH¢10.82 billion to bondholders under the Domestic Debt Exchange Programme (DDEP), marking a significant milestone in the country’s fiscal responsibility. This substantial payment, representing the third DDEP coupon disbursement since 2025, underscores the government’s commitment to meeting its debt obligations and strengthening investor confidence. The Ministry of Finance announced the full payment of GH¢41.36 billion under the DDEP program, a figure reflecting a substantial shift in the government’s debt management strategy.
The payment, executed on the close of business yesterday, was made in full and on schedule, a demonstrative action reflecting the government’s fiscal discipline and unwavering dedication to honoring its debt commitments. Minister of Finance, Dr. Cassiel Ato Forson, stated that ‘all future DDEP obligations will be paid in full and on schedule,’ reinforcing the government’s commitment to transparency and economic stability.
The DDEP, initially launched in 2025, has been instrumental in restructuring Ghana’s debt profile. Prior to this, the government had previously allocated GH¢19.4 billion to domestic bonds, resulting in a total of GH¢61.7 billion representing over 85% of GDP. The DDEP’s implementation was driven by a need to address unsustainable debt levels and the associated risks to the economy.
This latest payment represents a key component of the government’s broader efforts to bolster investor confidence. The Finance Minister highlighted the impact on government business, stating that the payment will not negatively affect other critical expenditures like wages, capital projects, and social programs. The DDEP’s impact has been felt across various sectors, as it has reduced the government’s reliance on revenue from less productive sectors.
Furthermore, the government has implemented a series of supplementary measures to mitigate potential risks. The launch of the Cedi Sinking Fund and the US Dollar Sinking Fund, designated as buffer accounts for future debt repayments, are key components of this strategy. These accounts are designed to enhance the country’s financial resilience and provide a mechanism for managing future debt obligations.
The government’s actions are underpinned by a renewed focus on debt management, driven by the need to achieve sustainable fiscal health. The DDEP was initially conceived as a solution to address unsustainable debt levels and the potential for sovereign default. The government, however, withdrew it and replaced it with a revised program in 2023, resulting in a reduction of the coupon rate and a haircut to the bond value.
The new terms of the DDEP were significantly revised, with a 10 per cent coupon rate and a 10 per cent haircut, reflecting the government’s commitment to safeguarding public funds and minimizing potential losses. The revised terms were approved by the New Patriotic Party (NPP) government, and a Memorandum of Understanding (MOU) was signed with Organised Labour and Pension Fund Trustees. The government also signed a Memorandum of Understanding (MOU) with Organised Labour on December 22, 2022, to facilitate the debt management process.
The total amount paid under the DDEP as of December 4, 2022, was approximately GH¢61.7 billion, significantly impacting the financial sector and increasing the risk of sovereign default. The government has also rolled out new safety nets – a Cedi Sinking Fund and a US Dollar Sinking Fund – to protect the country’s debt portfolio, aiming to bolster its long-term fiscal stability.
This payment is a critical step in the government’s commitment to fiscal responsibility and the long-term sustainability of Ghana’s economy. The DDEP has been a cornerstone of the government’s debt management strategy since 2025, and this payment reaffirms the government’s dedication to meeting its obligations and strengthening the country’s financial standing. The Ministry of Finance has also signed a Memorandum of Understanding (MOU) with Organised Labour and Pension Fund Trustees, further solidifying the government’s commitment to debt management.
The government’s actions have demonstrated a renewed focus on fiscal prudence and a commitment to upholding the terms of the restructuring memorandum. The DDEP’s success is a testament to the government’s efforts to restore confidence in Ghana’s debt management practices.
Source: Graphic Online
