Ghana saves $12 Billion through Domestic Debt Exchange Programme, says Finance Minister

Ghana’s Finance Minister, Dr. Mohammed Amin Adam, disclosed that the successful implementation of the Domestic Debt Exchange Programme (DDEP) has saved the country an impressive $12 billion. He made these remarks during a panel discussion at the 2024 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group, held on Wednesday, October 23.

The panel discussion focused

Read full articleon the challenges faced by low-income countries in managing debt, a pressing concern for many nations grappling with financial instability amid global economic uncertainties and external shocks. Dr. Adam emphasized that the DDEP has been instrumental in addressing Ghana’s financial difficulties and alleviating its debt load, thereby creating a more sustainable fiscal environment.

Launched in December 2022, the DDEP marked a pivotal moment in Ghana’s financial strategy. The program required domestic bondholders to exchange their existing bonds for new ones with modified terms, a critical maneuver aimed at reducing the government’s debt service obligations. This restructuring is seen as a foundational step towards broader debt restructuring efforts, essential for the nation’s economic recovery.

Dr. Adam elaborated on the success of the DDEP, stating that it laid the groundwork for subsequent restructuring initiatives. He noted that the government has made significant progress in managing its debt profile, including the successful restructuring of bilateral debt, which resulted in additional savings of approximately $2.8 billion.

“The DDEP was a great success, and we followed that with the restructuring of our bilateral debt, which was also very successful,” Dr. Adam said. “This led to a significant savings of about $2.8 billion, and we have also concluded the restructuring of our Eurobonds, amounting to about $13 billion, in the first week of this month, marking another great success.”

The Finance Minister highlighted that the benefits derived from these restructuring efforts include an outright debt cancellation of about $5 billion and another debt service relief of around $4.3 billion. “Between the bilateral creditors and the Eurobonds, we are talking about savings of about $12 billion, and we think this is a great success,” he asserted.

Moreover, Dr. Adam confirmed that the government is currently working on restructuring approximately $2.7 billion with its commercial creditors. He emphasized the importance of these initiatives, stating, “We are working very hard to conclude that,” reflecting the government’s commitment to ensuring fiscal stability and economic resilience.

As Ghana continues to navigate its financial landscape, the DDEP and its subsequent restructuring initiatives serve as critical components of a broader strategy aimed at enhancing the country’s economic viability. The Minister’s remarks underscore the need for continued collaboration with international financial institutions and stakeholders to secure sustainable growth and stability in the face of ongoing global challenges.

In conclusion, Dr. Adam reiterated the significance of the DDEP and the ongoing restructuring efforts, positioning them as essential steps toward revitalizing Ghana’s economy and ensuring its future financial health.