Strong participation in DDEP II spurs further hope of recovery

The nation has achieved a significant leap toward economic recovery by successfully executing its Domestic Debt Exchange Programme (DDEP) Phase II, backed by impressive levels of investor participation

These initiatives, meticulously designed to tackle financial challenges induced by the pandemic, encompassed U.S. dollar-denominated bonds, pension funds and cocoa bills, and were in the region of US$4billion – all of which exceeded participation expectations.

In a series of announcements, the Ministry of Finance unveilled the outcomes of its debt exchange initiatives. These achievements, which have outstripped projections, promise to play a pivotal role in propelling economic resurgence and restructuring efforts.

The exchange of U.S. dollar-denominated bonds witnessed a robust participation rate of approximately 92 percent, as US$741.7million worth of old bonds out of US$809million were tendered for new ones.

The finance ministry expressed its satisfaction in a statement, noting the strategic implications of this success for the economy.

The ministry’s statement read: “We are pleased to observe substantial participation from eligible holders in the exchange. This outcome aligns harmoniously with our commitment to realise the economic strategies outlined in the post-COVID-19 Programme for Economic Growth (PC-PEG) during these trying times”.

Simultaneously, the pension funds’ alternative offer exchange garnered an impressive engagement rate of around 95 percent, underlining government’s shrewd economic strategies amid the ongoing global turmoil.

Pension funds agreed to exchange GH¢29.6billion (US$2.6billion) of existing bonds for new notes maturing in 2027 and 2028 out of the original amount of GH¢31billion, carrying a total 21 percent coupon. Additionally, investors embraced the exchange of US$741.7million of foreign currency-denominated notes for new securities maturing in 2027 and 2028, with interest rates of 2.75 percent and 3.25 percent respectively.

“The success of the pension funds’ alternative offer exchange, achieving approximately 95 percent participation, reaffirms our dedication to implementing our economic strategies and reinforcing our path to recovery,” a statement from government emphasised.

In an exclusive interview with the B&FT, Executive Secretary-Chamber of Corporate Trustees, Thomas Kwesi Esso, a key negotiator, said: “The primary goals of our approach were to safeguard the patrimonial value of pension funds, ensure tradability of new bonds in the market, and secure liquidity through consistent coupon payments and timely maturity payments.

“We aimed to retain the original value of old bonds, address market uncertainties with tradable new bonds, and guarantee liquidity essential for pension fund cash-flow. Thus, we confidently advised our members to consider adopting the proposed alternative bonds.”

In yet another triumph, the Cocoa Board of Ghana (COCOBOD) observed an overwhelming participation rate of approximately 97.38 percent in its exchange programme – thus GH¢7.7billion out of the original amount of GH¢7.9billion. COCOBOD extended its appreciation to eligible holders and stakeholders for their steadfast support of the Cocoa bills exchange programme.

To further enhance its economic prospects, the cocoa industry regulator introduced new bonds maturing between 2024 and 2028 – offering a compelling 13 percent interest rate to investors who tendered their existing cocoa bills.

This success, analysts say, is poised to invigorate the vital cocoa sector – a key contributor to the economy.

To ensure a seamless transition for investors, government extended the settlement dates for each exchange to September 4, 2023. This move underscores government’s commitment to a smooth and efficient exchange process, reflecting its dedication to both investors and the nation’s financial stability.

Market observers have hailed these accomplishments as pivotal moments in the country’s economic journey, as these debt exchange programmes not only bolster investor confidence in government’s strategies but also actively contribute to enhancing financial stability and realising objectives outlined in the PC-PEG.

These accomplishments not only contribute to a financial turnaround but also pave the way for unlocking payments under a US$3billion IMF programme. The IMF programme, initially approved in mid-May, will provide additional disbursements contingent upon successful reviews.

Ghana’s determined efforts to restructure its debt have garnered international recognition and support. Successful implementation of the domestic debt exchange plan played a pivotal role in convincing the IMF of the country’s commitment to its loan restructuring goals, consequently attracting financing pledges from bilateral creditors under the Group of 20’s Common Framework.

While the country continues seeking further debt relief to achieve its target of reducing debt to 55 percent of GDP by 2028, these achievements in the DDEP 2 stand as a testament to the nation’s resilience and its strides toward economic prosperity in the face of adversity.


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The nation has achieved a significant leap toward economic recovery by successfully executing its Domestic Debt Exchange Programme (DDEP) Phase II, backed by impressive levels of investor participation