Ghana’s Domestic Debt Exchange Programme (DDEP), although introduced as a lifeline to rescue the country from its debt crisis, could have been setting the stage for another debt default if not for subsequent interventions by the current government.
This is the view of Economist and Political Risk Analyst, Dr. Theo Acheampong, who believes that certain initiatives of the government have averted the possible calamity and strengthened the government’s debt repayment capacity.
Dr Acheampong, who also serves as a Technical Adviser at the Ministry of Finance, argues that the restructuring programme was designed in a way that exposed Ghana to the risk of returning to the debt market for another costly restructuring or expensive refinancing.
His assessment raises questions about whether the DDEP truly resolved Ghana’s debt challenges or merely postponed the financial pressure.
DDEP: A Rescue Programme with Another Crisis Lurking?
According to Dr Theo Acheampong, the debt exchange programme carried the risk of leaving Ghana unable to meet its future repayment obligations, potentially forcing the country into another round of painful debt restructuring.
He warned that the alternative would have been expensive refinancing, effectively pushing the country’s debt problems further into the future rather than resolving them.
“DDEP was designed for us to likely default again and to go through another round of costly restructuring or expensively refinance the debt and thus kick the can down the road,” he stated.
The concern is particularly significant given the economic and financial costs Ghana incurred during the previous debt restructuring, including losses suffered by domestic bondholders and disruptions to the financial sector.
Sinking Fund: The Safety Net
However, Dr Acheampong believes the government has avoided that potential outcome through deliberate measures to strengthen its debt repayment buffers.
He pointed specifically to the recapitalisation of the Sinking Fund’s dollar and cedi accounts, alongside the decision to dedicate 7% of non-tax revenue towards meeting debt obligations.
These interventions, he argued, have improved the government’s ability to honour its commitments without returning to the market for expensive borrowing.
According to him, the results are already becoming evident, with Ghana now able to meet certain debt obligations ahead of schedule and in full.
“Luckily, we’ve taken proactive and prudent measures… such that, today, we can even pay AHEAD OF TIME AND IN FULL. It doesn’t happen by chance,” he emphasised.
The Bottomline
The economist’s comment indicates an important distinction between restructuring debt to manage an immediate crisis and building the financial capacity to repay it sustainably.
This shows that, for Ghana, the ultimate test of the DDEP was not simply escaping its immediate debt difficulties, but whether it could meet future obligations without another costly rescue operation.
