Ghana prepares for announcement of 2nd phase of DDEP
The Ghanaian government is on the verge of disclosing the memorandum for the second round of the Domestic Debt Exchange Programme (DDEP), signaling its commitment to addressing outstanding domestic debts. Engaging in extensive negotiations with investors, authorities are now poised to unveil the proposed terms for exchanging USD-denominated domestic bonds, Cocoa bills, and other domestic debt instruments.
The forthcoming phase of the DDEP will target the exchange of approximately GH¢122 billion in outstanding domestic debts, encompassing cocoa bills, exempted bonds held by the pensions sector, USD-denominated local bonds, and non-marketable debts held by the Bank of Ghana. Although organized labor has expressed reservations about including pension funds in the DDEP after their previous exemption, ongoing behind-the-scenes negotiations ahead of the imminent announcement offer hope for potential agreement.
A successful implementation of the second leg of the DDEP holds the promise of substantial interest savings, which could significantly improve the country’s fiscal outlook in the short term. Moreover, the exchange would create the much-needed fiscal space necessary to allocate funds towards growth-oriented expenditure, fostering an environment conducive to economic expansion and development.
As Ghana prepares to reveal the details of the second phase of the DDEP, market participants eagerly await further insights into the proposed terms and the potential impact on the country’s debt landscape.
