An Economic Policy Advisor to the governing National Democratic Congress (NDC) has commended the Domestic Debt Exchange Programme (DDEP) spearheaded by former Finance Minister Ken Ofori-Atta, describing it as a key turning point in restoring fiscal stability and boosting international confidence in Ghana’s economy.
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 of the DDEP 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 credit 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
Dr. Khalid’s remarks follow 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.
He emphasised that the improved rating is not a license to return to excessive borrowing, but rather a signal of the need to remain committed to prudent fiscal management.
“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 said.
Dr. Khalid 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,” he explained.
While noting that the improved Fitch rating mainly targets external markets, Dr. Khalid made it clear that the government is not in a hurry to return to the international capital markets.
“This is for the external market, which we are not ready, as of yet, to start engaging. We believe in stabilising the domestic market, which is why we have internal controls,” he added.
Background: 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 sought to restructure approximately GH¢137 billion in domestic bonds. The initial terms were met with stiff opposition from both individual and institutional bondholders, forcing the government to withdraw the original programme and replace it with 12 new ones.
Despite public resistance, the programme was eventually completed with participation from major domestic institutional investors.
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