An Economic Policy Advisor to the governing NDC has commended the Domestic Debt Exchange Programme (DDEP), which was spearheaded by former Finance Minister Ken Ofori-Atta, crediting it as a key turning point in restoring fiscal stability and gaining renewed international confidence.
In an interview on Joy News’ PM Express, Dr. Sharif Mahmud Khalid, Economic Policy Advisor to Vice President Professor Jane Naana Opoku Agyemang, acknowledged the significance and instrumentality of the programme in reversing the economic downturn Ghana faced in the aftermath of the COVID-19 pandemic and global inflationary pressures.
He noted that the programme provided much-needed breathing space for the government to restructure its finances and re-engage rating agencies with a credible fiscal path.
“If you look at these [credit] ratings when we took office, remember that we started to make some gains thanks to the Domestic Debt Exchange Programme. That programme gave us some breathing space, and that would impact any external ratings,” Dr. Khalid stated.
Fitch Ratings upgrade
The advisor’s remarks come on the heels of a recent upgrade by Fitch Ratings, which raised Ghana’s Long-Term Foreign-Currency Issuer Default Rating from ‘Restricted Default’ to ‘B-‘ with a Stable Outlook—a development seen by many as a vote of confidence in the government’s ongoing economic reforms.
Dr. Khalid further emphasised that the improved rating is not a license to return to excessive borrowing, but rather a reminder of the work that still lies ahead.
“This rating is not just for us to celebrate and go back to borrowing. We are not getting bullish. We are focused. We want to stabilise the domestic market first,” he stated.
He also outlined several measures the government has implemented to reinforce fiscal discipline, including structural reforms, tighter spending controls, and a reduction in political appointments.
“As far as spending or what you call overspending, we’ve been tightening controls. We’ve reduced appointments, and that in itself is a signal,” Dr. Khalid explained.
While noting that the improved Fitch rating is primarily targeted at external markets, he made it clear that the government is not rushing back to international capital markets just yet.
“This is for the external market, which we are not ready as of yet even to start pushing through. We believe in stabilising the domestic market, which is why we have internal controls,” he added.
The DDEP
The Domestic Debt Exchange Programme, introduced in late 2022 under then-Finance Minister Ken Ofori-Atta, involved a comprehensive restructuring of Ghana’s domestic bonds, aimed at reducing the country’s unsustainable debt service burden.
The DDEP was introduced to restructure domestic bonds of approximately GH¢137 billion. The proposed terms, however, were met with stiff opposition from both individual and institutional bondholders. This development forced the government to withdraw its earlier programme and replace it with 12 new ones.
The initiative faced stiff public resistance initially but was eventually completed with participation from major domestic institutional investors.
