Economist Prof. Patrick Asuming says the latest payment of maturing coupons under the Domestic Debt Exchange Program (DDEP) by the government, through the Ministry of Finance is a major boost for the ongoing recovery of investor confidence in the economy.
The Senior Lecturer at the University of Ghana Business School believes the first payment honored by the new administration is very crucial in restoring the lost trust in Ghana‘s financial market.
A statement from the presidency on Monday, February 17, 2025, announced that the Ministry of Finance has paid a coupon of GH¢ 6.081 billion to all DDEP bondholders. In addition, the government also honored the Payment-In-Kind (PIK) portion of the GH¢ 3.46 billion which was paid into the respective securities accounts of the bondholders.
An amount of GH¢ 9.7 billion was also paid in a Sinking Fund as a debt service recovery account to serve as a buffer for the 5th DDEP coupon that will be due in July and August 2025.
Speaking with Brand Focus Africa, the economist further indicated that apart from the latest payment bringing another sense of relief to the bondholders, it signals a commitment by the new government to honoring the debt agreements. This, Prof. Asuming says is a key factor in rebuilding the credibility of Ghana’s financial system.
The debt restructuring process left many investors uncertain about the security of their investments in government instruments. He says the skepticism reached its peak in the final months of the previous administration.
With the news administration demonstrating a willingness to settle bondholder obligations, the economist says it is a good step toward fiscal responsibility as this will ensure that Ghana remains an attractive investor destination.
“I think it is very important that we settle the DDEP. I mean, after all the pain we’ve taken them through, we really have no business failing to honor it. I mean, under the previous administration, people couldn’t take it for granted when they are bound to be paid,” he indicated.
He added that: “I think all of this will help. All of this will help ease some of the tensions in the financial markets and it’s only good for the government. It definitely brings some positivity. I think, you know, it has become so toxic towards the end of the previous regime.”
“Confidence was completely low. I think that we had a new government, there’s a positive bounce, but to see that, you know, they are trying to be responsive to settling this, I think it clears doubt. It helps and it keeps the bounce going,” Prof. Asuming
With the latest development from the new government, the financial sector will be watching closely to see if the government continues on this trajectory of delivering on its commitment to honor the debt obligations to investors.
For now, investors can take solace in the fact that the administration is working to rebuild lost trust, a critical foundation for economic progress.
