Dr. Mohammed Amin Adam, Ghana’s Minister of Finance, has formally apologized to Ghanaians for the significant hardships imposed by the Domestic Debt Exchange Programme (DDEP). This initiative, which aimed to stabilize the nation’s fiscal landscape, has had profound impacts on various sectors and individual livelihoods.
The DDEP was launched to address Ghana’s unsustainable debt levels by restructuring domestic bonds. Existing bonds were exchanged for four new bonds maturing between 2027 and 2037, and interest payments for domestic bondholders were slashed to zero percent in 2023 and five percent in 2024. This move, while crucial for national financial stability, resulted in a significant reduction in income for many bondholders, including banks, non-bank financial institutions, and private individuals.
The programme has provided substantial fiscal relief to the government, saving approximately GH¢61.7 billion in 2023. However, this came at a cost to bondholders, who experienced losses ranging from 14% to 58.4%, depending on the type of bonds held. The most affected were the Bank of Ghana and holders of Cocoa bills, while pension funds were exempted from cuts.
The hardships resulting from the DDEP have been felt widely. The reduction in bond values and the halt in interest payments have decreased disposable incomes, impacting household consumption and financial stability. Additionally, the banking sector, which is crucial for economic growth, has faced significant strain, necessitating government intervention to stabilize and support it.
In response to the negative impacts, Dr. Adam said the government is aware of the public’s suffering and is therefore committed to mitigating these effects. He assured that steps are being taken to support affected sectors and individuals, aiming to restore confidence and stability in the economy.
