The Government of Ghana has assured persons who refused to exchange their bonds for new ones under the Domestic Debt Exchange Programme that their outstanding coupon payments and maturing principals will be settled.

“The Government would like to reassure all individual bondholders who elected not to participate that your coupon payments and maturing principals, like all Government bonds, will be honoured in line with Government fiscal commitments,” government said in a statement issued by the Ministry of Finance on Tuesday, February 14, 2023.

The Government’s Domestic Debt Exchange Program (DDEP) officially closed on Friday, February 10, 2023.

Government subsequently announced that the programme recorded over 80% participation of eligible bonds.

The Government in the statement thanked the people of Ghana for their “forbearance and support throughout these very difficult times.”

Honour outstanding payments on due bonds – Bondholders to Ofori-Atta
The Individual Bondholders’ Forum on Monday called on the government to honour all coupon and principal payments due bondholders with bonds not tendered into the Domestic Debt Exchange Programme.

In a statement, Convener Senyo Hosi reminded the Finance Minister, Ken Ofori-Atta, that payment of coupons and principal for bonds that matured since the 6th of February to date (herein referred to as ‘Due Bonds’) remain outstanding.

In the letter, the individual bondholders stated that honouring payments on due bonds will re-engineer public and investor confidence and trust in the activities of the Finance Ministry.

Following an economic downturn and challenges in servicing its debt, government introduced the domestic debt exchange programme to buy time to honour its fiscal obligations.

Government said the country’s economic meltdown will be dire without the debt exchange programme.

“The DDEP is being done to help protect the economy and enhance our capacity to service our public debts effectively. The alternative of not executing the DDEP would have brought grave disorder in the servicing of our national debt and exacerbated the current economic crisis. The Government is, therefore, grateful for the overwhelming participation of all bondholders. Your support and contributions have gotten your country much closer to securing the IMF programme,” the Finance Ministry added in the statement.

Background

Ghana’s debt stock hit GH¢575 billion in November 2022 accounting for 93.5% of the country’s total GDP.

The debt restructuring programme tagged as the Domestic Debt Exchange Programme forms part of the requirements for the Government of Ghana to secure a $3 billion bailout package from the International Monetary Fund (IMF).

Government has already secured a staff-level agreement awaiting the IMF Board’s approval.