The government is poised to save about GH¢1 billion in interest payments by bringing forward the repayment of GH¢29 billion in principal under the Domestic Debt Exchange Programme (DDEP).
This early repayment initiative, announced by Finance Minister Dr. Cassiel Ato Forson during the presentation of the 2027 Budget to Parliament on Thursday, November 12, aims to ease pressure on public finances as Ghana prepares for major debt maturities in 2027.
Dr. Forson unveiled an early redemption offer for DDEP bondholders whose bonds are due on February 16, 2027. The offer, effective November 12, allows bondholders to collect their principal ahead of the scheduled maturity date.
Speaking later on the Citi Breakfast Show, Dr. Forson explained that the move is meant to smooth out the country’s debt repayment schedule and avoid the risk of default. “If you look at our debt profile, you see that the two are like mountains there, and everything else is stable. So, in a normal year, you pay about GH¢5 billion, GH¢5 billion, and then in one year, GH¢40 billion. So, what do you do to meet that GH¢40 billion? You need to plan,” he noted.
He clarified that the early redemption covers principal only, not interest. “No, I’m not paying the interest earlier. But if I pay you the GH¢29 billion, then I will save about GH¢1 billion in interest,” he explained.
According to Dr. Forson, the government has accumulated GH¢29 billion in the Cedi Sinking Fund, enough to fully meet the February 2027 principal obligation. Additional buffers are being built to cover the GH¢11.1 billion interest payment due at the same time.
The February maturity is part of about GH¢53 billion in DDEP principal and interest obligations due in February and August 2027. Beyond domestic debt, the government also intends to settle a US$590 million Eurobond obligation maturing on January 2, 2027, before the end of this year, further reducing the burden heading into 2027.
Dr. Forson added that the government is introducing financing and borrowing reforms to ensure future debt obligations are managed prudently, helping Ghana avoid another debt crisis.
Source: Apexnewsgh.com