DDEP necessary for $3bn IMF deal – Finance Chief Ken Ofori-Atta says
Finance Chief Ken Ofori Atta, has revealed that the Domestic Debt Exchange Programme (DDEP) by government is a necessary requirement for a deal with the IMF.
According to him, the government has no choice but to undertake the debt restructuring programme to put the country’s debt level on a sustainable path.
An IMF mission team is presently in the country to continue discussions with the authorities on the country’s post-COVID programme for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement.
In a press briefing on Monday, December 5, Finance Chief Ofori-Atta noted that no individual bondholder will lose their funds in the proposed programme, further assuring financial sector players of government’s support to minimise the impact of the programme on their activities.
The Minister hinted that the Governor of the Bank of Ghana, Dr. Ernest Addison, and other heads of regulators will be tasked to engage stakeholders on the debt management programme.
Currently, Ghana is seeking an economic programme from the IMF to address its balance of payment and other financing challenges.
As part of the deal, the government has embarked on a debt sustainability analysis which indicates that the country’s debt level which exceeded 100% of Gross Domestic Product is unsustainable, hence the need for such an action.
There are already calls on the government to provide a road map to avoid the negative impact on the financial sector and other sectors of the economy.
The Financial Minister pointed out that the World Bank and other development partners are on board to support the government in this regard.
Meanwhile, launching the debt programme, the Finance Minister noted that the government expects overwhelming support for the domestic debt exchange programme, asserting that the success of the programme is dependent on the cooperation of the investing public.
“This debt exchange programme provides an orderly way to put our economy back on track,” said the Minister during the launch.
Mr Ofori-Atta said the domestic debt exchange programme is the surest way to restore the economy back on track to create jobs and protect the incomes of Ghanaians.
“The government will take all appropriate measures to safeguard the solvency of the financial institutions involved in the debt exchange.
“The government has been working hard to limit the impact of the domestic debt exchange on investors holding government bonds,” he remarked.
