A recent public debate triggered by a Citi News report suggesting that Ghana’s debt service obligations could rise sharply again from 2027 has reopened discussion around the Domestic Debt Exchange Programme (DDEP) and its long-term impact on the economy.
Commenting on the issue, Yaw Ohemeng argued that many Ghanaians never fully understood the structure and effect of the DDEP. In his view, apart from the Bank of Ghana, the programme was not principally about outright principal haircuts for most domestic bondholders, but rather about postponing debt servicing obligations, reducing coupon payments, extending maturities, restructuring state-related liabilities, and creating the fiscal breathing space needed to prevent a deeper sovereign crisis.
Ghana’s Domestic Debt Exchange Programme (DDEP), launched on 5 December 2022, was a direct response to one of the most severe economic crises in the country’s recent history. After nearly a decade of mounting fiscal pressures — intensified by the COVID-19 pandemic, global inflation, and the Russia-Ukraine conflict — Ghana’s debt-to-GDP ratio had risen sharply, interest payments were consuming an unsustainable share of government revenue, and international capital markets had effectively closed to the country.
Yet to understand the significance of the DDEP, it is important to first understand the broader economic context that preceded it.
Ghana’s Growth Slowdown Before the Recovery
By 2014–2016, Ghana’s economy had entered a difficult macroeconomic period marked by slowing growth, fiscal pressures, inflationary instability, energy sector challenges, and IMF-supported stabilisation measures.
Ghana GDP Growth Rate (%)
| Year | GDP Growth Rate |
| 2014 | 4.0% |
| 2015 | 2.1% |
| 2016 | 3.4% |
The slowdown reflected growing fiscal stress and weakening macroeconomic conditions. It was against this backdrop that Ken Ofori-Atta assumed office as Finance Minister in 2017.
The Pre-COVID Recovery Under Ken Ofori-Atta
Under Ken Ofori-Atta’s stewardship, Ghana subsequently recorded one of its strongest periods of sustained economic growth outside the 2011 oil-boom year.
Ghana GDP Growth Rate During the Early KOA Period
| Year | GDP Growth Rate |
| 2017 | 8.1% |
| 2018 | 6.3% |
| 2019 | 6.5% |
This period saw:
- renewed investor confidence,
- stronger domestic revenue mobilisation,
- improved macroeconomic stability,
- and a return to strong growth momentum prior to the COVID-19 shock.
The momentum, however, would later face unprecedented global disruption.
COVID-19 and the Return of Fiscal Crisis
Like many economies around the world, Ghana faced severe pressure from the COVID-19 pandemic beginning in 2020. Revenues weakened, emergency expenditures surged, global inflation accelerated, and borrowing costs increased dramatically. The Russia-Ukraine conflict later compounded the crisis through higher fuel, food, and import costs.
By 2022:
- Ghana’s debt-to-GDP ratio had climbed to approximately 89 percent,
- interest payments were consuming a dangerously high share of revenues,
- and access to international financial markets had effectively collapsed.
The country stood at the edge of a major sovereign debt crisis.
The Domestic Debt Exchange Programme (DDEP)
It was within this environment that the Domestic Debt Exchange Programme was introduced.
The programme invited holders of domestic bonds — including commercial banks, pension funds, individual investors, and institutional bondholders — to exchange existing bonds for new instruments with:
- longer maturities,
- reduced coupon rates,
- and improved debt sustainability terms.
The proposal faced fierce opposition in its early stages, particularly from pensioners and retail bondholders who feared severe losses. Public pressure forced a redesign into 12 separate bond exchanges before the first phase was eventually completed in February 2023.
Despite the controversy, the fiscal outcomes were significant.
Fiscal Impact of the DDEP
Key Debt Sustainability Indicators
| Indicator | Before DDEP | After DDEP |
| Weighted Average Interest Rate | 21.2% | 12.7% |
| Average Time to Maturity | 2.7 years | 6.2 years |
| Public Debt-to-GDP Ratio | 73.1% | 66.4% |
The DDEP alone contributed approximately 10 percentage points to the reduction in Ghana’s public debt ratio.
Finance Minister Dr. Mohammed Amin Adam later disclosed that the programme had generated approximately US$12 billion in savings, describing it as instrumental in restoring fiscal sustainability.
Gateway to IMF Support and International Recovery
Beyond the immediate debt metrics, the DDEP became the gateway to broader international recovery efforts.
The programme:
- unlocked the IMF’s US$3 billion Extended Credit Facility in May 2023,
- enabled the restructuring of Ghana’s US$13 billion Eurobond portfolio in 2024,
- and helped restore confidence in Ghana’s debt trajectory.
The recovery indicators that followed were notable:
Selected Recovery Indicators
| Indicator | 2022 | 2024 |
| Fiscal Deficit (% of GDP) | 11.8% | 4.8% |
| GDP Growth (Q3 2024) | — | 6.2% |
By December 2025, the IMF had noted improvements across:
- inflation control,
- reserve accumulation,
- economic growth,
- and debt sustainability.
The Man Behind the Programme
No account of the DDEP is complete without examining the man who conceived and drove it.
Ken Ofori-Atta personally announced the programme on 4 December 2022 and later defended it before Parliament in February 2023. He did so under enormous political pressure — facing:
- calls for resignation,
- criticism from the opposition,
- internal resistance from members of his own party,
- and public anger from pensioners and retail investors affected by the restructuring.
Critics argued that his own fiscal decisions had contributed to the conditions that made the DDEP necessary. Yet despite the backlash, he chose to proceed with one of the most politically difficult economic restructuring exercises in Ghana’s democratic history.
He negotiated with institutional bondholders, worked closely with the IMF, and supervised a technically complex redesign process under sustained public and political pressure.
A Reassessment of Ken Ofori-Atta
The reassessment of Ken Ofori-Atta’s legacy has become increasingly notable. As I argued in my earlier article titled “BOG LOSSES: The Work of Ken Ofori-Atta Must Be Reassessed,” the complexity of Ghana’s economic structure, limited fiscal space, import dependence, pressure on the local currency, and the realities of Cabinet governance make economic management far more difficult than public discourse often acknowledges. The Finance Minister, though influential, ultimately operates within a broader Cabinet system and must often implement collective government decisions, even where those decisions place additional strain on the economy.
It is within this broader context that Ken Ofori-Atta’s tenure deserves a more balanced reassessment. Development economist Dr. George Domfe of the University of Ghana has argued that without the DDEP and broader stabilisation measures introduced during the crisis, Ghana’s current macroeconomic recovery would not have been possible. Even within the incoming NDC administration, Economic Policy Advisor Dr. Sharif Mahmud Khalid reportedly acknowledged the DDEP as a critical turning point in restoring fiscal stability, noting that some of the improved credit conditions inherited by the new government had their roots in the restructuring process.
Ghana also recorded one of its strongest sustained periods of policy-driven GDP growth between 2017 and 2019 under Ofori-Atta’s stewardship. During the same period, difficult but consequential decisions were taken, including banking sector reforms that protected over 4 million depositors, albeit at significant fiscal and political cost.
Much of the criticism against the NPP government and Ken Ofori-Atta centres on claims that they “ran the economy into the abyss” and imposed “haircuts” on Ghanaians through the DDEP. However, such narratives often ignore the broader historical and global context surrounding the crisis. Prior to the COVID-19 pandemic, Ghana had returned to one of its strongest periods of sustained macroeconomic growth between 2017 and 2019 before the pandemic severely disrupted trade, aviation, tourism, revenue mobilisation, and economic activity across the world.
Had the pandemic not occurred — with borders closed, revenues collapsing, and governments globally compelled to undertake emergency spending — Ghana may never have experienced the level of fiscal shock that later necessitated reforms such as the DDEP. At the height of the crisis, the Akufo-Addo administration deliberately prioritised the protection of lives and livelihoods. President Nana Akufo-Addo openly acknowledged this difficult reality when he stated that while economies could be revived, lost human lives could not be restored. In practical terms, this required aggressive spending during a period of collapsing revenues in order to sustain households, businesses, healthcare systems, and the broader economy.
It is therefore unfortunate that some political actors continue to weaponise the painful consequences of the crisis to demonise a man who carried enormous responsibility during one of the most difficult economic periods in Ghana’s modern history.
The broader historical argument emerging is therefore not simply that Ken Ofori-Atta presided over a painful restructuring programme, but that he confronted one of the most difficult economic crises in modern Ghanaian history and chose politically costly reform over economic collapse.
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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
Source: www.myjoyonline.com