DDE: Debt programme executed in a transparent, efficient manner – Finance Minister
Finance Minister Ken Ofori-Atta, has said the execution of the Domestic Debt Exchange Programme (DDEP) was transparent, efficient, and expedited, while minimizing the impact on investors holding government bonds.
The DDEP was launched with the aim of alleviating Ghana’s debt burden in a timely and efficient manner. The program invited bondholders to exchange their existing government bonds for longer-term instruments that carry a lower interest rate.
The exchange was voluntary, and bondholders who chose not to participate were unaffected. The government hoped that the program would help reduce the country’s debt burden, allowing it to meet its debt sustainability targets.
The success of the DDEP was evident, with approximately 85% of eligible bondholders participating in the invitation to exchange. This high level of participation was a welcome surprise, given that bondholders were under no obligation to participate in the program.
The Finance Minister expressed his gratitude to Ghanaians for their support and patience during the challenging economic times, and he thanked the overwhelming number of bondholders who participated in the program.
Ofori-Atta noted that the success of the DDEP would build momentum for the external debt restructuring program, which has also commenced. The government has officially asked bilateral creditors for a Debt Treatment initiative under the G-20 Common Framework.
Negotiations with commercial creditors have also started, with two preliminary discussions and the exchange of information already underway. The Finance Minister expressed hope that commercial creditors would understand the government’s desire to negotiate softer terms with bilateral creditors, paving the way for discussions with private creditors.
The government recognizes the continued importance of the DDEP in closing the financing gap and enabling the government to meet the debt sustainability target of 55% of debt-to-GDP in present value terms by 2028. The Finance Minister emphasized that the program’s success has allowed the government to meet its obligations and reduce the debt burden without imposing excessive hardship on bondholders.
With Ofori-Atta leading the effort, the government has, despite the odds, managed to secure an IMF staff level agreement and a domestic debt restructuring in record time. The Minister reiterated his hope that Ghana would obtain IMF board approval by the end of March, as part of efforts to restore the country to macro-economic stability.
The government’s commitment to fiscal discipline and prudent economic management has paid dividends, enabling Ghana to overcome significant economic challenges and emerge stronger and more resilient.
The success of the Domestic Debt Exchange Programme represents a significant milestone for Ghana’s economy, signaling the government’s commitment to debt sustainability and prudent economic management. The government’s efforts to reduce the debt burden and secure favorable terms with bilateral and commercial creditors have been commendable,
