Government Boosts Investor Confidence with Successful Domestic Bond Payments

On August 21, 2025, 7:41 AM

Government is well-positioned to attract investor participation if it reopens the domestic bond market, following the successful settlement of coupon payments under the Domestic Debt Exchange Programme (DDEP).

That’s the view of Head of Finance at Merban Capital, Nelson Cudjoe Kuagbedzi.

Government on Tuesday, August 19, 2025 settled GH¢9.7 billion in coupon payments under the Domestic Debt Exchange Programme, bringing total payments so far in 2025 to GH¢19.4 billion.

Nelson Cudjoe Kuagbedzi says despite recent undersubscription of Treasury bills, confidence in the government’s debt servicing record remains strong.

“Government credibility will shore up. If the government decides to go back and borrow from the capital market in terms of issuing new bonds, I don’t think investors will have any problem going the. Treasury bills rate have fallen sharply. Government for the past two auctions have registered under subscription and so with government demonstrating this level of commitment by paying the coupons, when they begin to issue the new bonds you realize that most investors will be moving away from the treasury bill market to the bonds market.”

“This is also good news for government because government will have enough time to prepare and pay those debt unlike treasury bill that every now and then, maturity comes and government has to refinance those maturity through treasury bill,” he said.

The Domestic Debt Exchange Programme (DDEP) was part of Ghana’s broader debt restructuring plan introduced in late 2022 as a condition for securing an IMF bailout.

The programme was designed to make the country’s debt more sustainable by reducing the government’s near-term debt servicing obligations.

According to the Ministry, the latest payment reflects the Government’s unwavering commitment to honouring the terms outlined in the Memorandum of Understanding signed with investors under the exchange programme.

Officials say the move is also expected to strengthen investor confidence and bolster Ghana’s fiscal credibility.

As part of measures to safeguard future debt repayments, the Government has created two dedicated sinking fund accounts in line with the 2025 Mid-Year Fiscal Policy Review and the provisions of the Public Financial Management Act, 2016 (Act 921), as amended.

These include a Cedi Sinking Fund Account and a US Dollar Sinking Fund Account, which will serve as liquidity buffers to ensure the timely redemption of bonds maturing in 2026, 2027, and 2028.

The Ministry further assured both investors and the public that all subsequent debt obligations, including those under the DDEP, will be honoured fully and on schedule.