Ghana Disburses $910 Million in Domestic Debt Interest Amid Economic Recovery

Ghana has successfully paid 10 billion cedis, equivalent to $910 million, as interest under its Domestic Debt Exchange Programme (DDEP). This announcement was made by the Finance Ministry on Wednesday and represents the sixth coupon payment since the nation commenced its debt restructuring process.

The Ministry stated that this disbursement is aimed at reassuring both local and international investors, bolstering market confidence, and enhancing the country's credit standing. Furthermore, it is expected to promote overall stability within the financial sector.

According to the ministry, this latest payment is the second instance of a "full cash" coupon settlement, meaning it did not involve any payment-in-kind component. This achievement is seen as an indicator of the nation's enhanced fiscal capabilities and a stronger position in terms of solvency.

Ghana, globally recognized as the second-largest producer of cocoa, initiated the DDEP in late 2022. This program is part of a comprehensive strategy to reinstate debt sustainability, following a severe fiscal strain that necessitated a debt overhaul and adversely affected financial institutions, asset managers, and pension funds holding significant government debt instruments.

The interest paid covers coupon obligations on cedi-denominated financial instruments that were subject to exchange under the DDEP. This action is in accordance with the programme's restructuring memorandum and the government's wider objectives for debt management and fiscal consolidation.

Looking forward, the Finance Ministry indicated Ghana's commitment to meeting all future DDEP obligations. The government also plans to reinforce its liquidity buffers and improve macroeconomic conditions to help reduce inflation and interest rates.

Additionally, the government intends to re-enter the domestic debt market within the current year. To facilitate this, it has already appointed specialist firms to manage the bond issuance process.