In October 2023, Stears assessed Ghana’s strategic initiatives to restructure its debt in response to unsustainable debt levels. We believe Ghana’s success with debt restructuring to attain its 55% debt-to-GDP target will hinge on its ability to commit to fiscal discipline.
The country’s debt restructuring began on December 5 2023, with its Domestic Debt Exchange Programme (DDEP), which entailed exchanging existing government debt instruments, particularly bonds, for new ones with modified terms and conditions. The external debt restructuring is also underway.
By September 2023, the Ghanaian government successfully concluded the DDEP, resulting in a transformation in the composition of domestic debt. The average age of domestic debt increased from 8.5 years in 2020 to 9.5 years, and the average coupon rate on outstanding debt declined by an average of 1,000 basis points to 10%, providing the government with the much-needed fiscal space.
However, the implementation of the DDEP had substantial