The Deputy Finance Minister, Dr. John Kumah, says the government’s settlement of the first coupon payment of bonds affected by the Domestic Debt Exchange Programme (DDEP) is a confirmation of the government’s commitment to the success of the DDEP.
Speaking in an interview on Eyewitness News on Citi FM in Accra on Tuesday, the deputy minister said, “This is a confirmation of the government’s commitment to the continued success and credibility of the domestic debt operations that the government undertook in the early part of the year.”
“It is a good thing, and it assures the market of confidence and the government will continue to keep to its obligations as far as the debt operations and restructuring is concerned.”
Mr. Kumah assured all and sundry that the government will not relent on its obligation to pay other coupons when they are due.
“Let me assure you and to assure all bondholders that government is committed to its obligation and as soon as all coupons are due, government will respect its obligations,” he stated.
Earlier, the government, through the Ministry of Finance, began the process of settling the first coupon payment of bonds affected by the domestic debt exchange programme.
According to the Ministry, the matured coupons amount to GH¢2.4 billion, and instructions have already been sent for settlement.
The DDEP was launched in 2022 in an effort to restructure Ghana’s unsustainable debt burden.
Under the programme, eligible bondholders were given the option to exchange their old bonds for new bonds with lower interest rates and longer maturities.
The coupon payment for the affected bonds was agreed to be 5%, which was lower than the interest rates on the old bonds.
However, there were initial market uncertainties about whether the government would be able to make the 5% coupon payment. The Ministry of Finance has allayed these concerns, stating that the settlement of the first coupon payment is consistent with the government’s commitment to the continued success and credibility of the country’s domestic debt operations.
The ministry also noted that the new bonds that were issued under the DDEP now stand as the dominant instruments in the domestic bond market.