The Minority in Ghana’s Parliament has filed a private members’ motion to pass a resolution on the Domestic Debt Exchange Programme (DDEP). The caucus has sent a notice to the Speaker of Parliament requesting that the government’s full debt restructuring proposal be laid before the House by the Minister of Finance, Ken Ofori-Atta, for discussion.
The DDEP aims to reduce the country’s debt to more sustainable levels by exchanging existing bonds for new ones with a more flexible interest payment plan. However, since the government announced the debt restructuring programme, the minority has rejected it, and it has faced opposition from groups and individuals.
The government implemented the domestic debt exchange programme to give itself more time to meet its fiscal obligations in the face of an economic downturn and difficulties in servicing its debt. Without the programme, the government warned that the nation’s economy would collapse severely.
Ghana is currently requesting a $3 billion bailout from the International Monetary Fund (IMF) to bolster the struggling national economy. One of the requirements before the Bretton Woods institution’s board evaluates Ghana’s request is the domestic debt restructuring scheme. A staff-level agreement between Ghana and the IMF was achieved in December, opening the door for the $3 billion rescue.
The motion comes amid concerns about Ghana’s debt burden, which currently stands at GHS332 billion, with external debt accounting for 53% of the total, according to the Bank of Ghana’s summary of financial and economic data for October 2021. The DDEP is expected to help reduce the debt burden and create more fiscal space for the government to undertake its developmental agenda.
Earlier, the Finance Minister, Ken Ofori-Atta, appeared before Parliament to brief the house on the government’s Domestic Debt Exchange programme. However, the Minority’s private members’ motion seeks to have a more detailed discussion on the government’s debt restructuring proposal, as they have rejected the programme and believe it needs further scrutiny.