DDEP the “least painful form of debt restructuring” for Ghana’s financial market – Finance Chief Ofori-Atta says
In the Exchange Memorandum published by the Ministry, the Finance Ministry notes that the DDEP is part of a more comprehensive agenda to restore debt and financial sustainability, adding that the successful completion of the DDEP will contribute to the unlocking of the needed support from the international community and allow Ghana reach debt targets agreed with the IMF.
The announced Domestic Debt Exchange Programme (DDEP) is the least painful form of a debt restructuring programme for the country’s domestic financial market, the Finance Minister Ken Ofori-Atta has said.
Further asserting that the DDEP was adopted by government to alleviate the country’s debt burden in the most transparent, efficient and expedited manner.
In the Exchange Memorandum published by the Ministry, the Finance Ministry notes that the DDEP is part of a more comprehensive agenda to restore debt and financial sustainability, adding that the successful completion of the DDEP will contribute to the unlocking of the needed support from the international community and allow Ghana reach debt targets agreed with the IMF.
“The objective of the DDEP is to reduce the excessive burden created by debt on our economy and reach debt sustainability targets defined by the IMF for the period through 2028 and beyond.
“To restore debt sustainability, we plan to reduce our total public debt-to-GDP ratio to 55% in present value terms,” stated the Minister.
To minimise the impact of the DDEP on the financial sector, the Finance Minister has revealed plans by government to set up a Financial Stability Fund (FSF).
According to the Finance Minister, the FSF established with the help of development partners will provide liquidity support to banks, pension funds, insurance companies and fund management companies in the country.
This, he noted in an address on Sunday, December 4, 2022, is to ensure that financial institutions meet their obligations to the investing public.
“Government recognizes that our financial institutions holds a substantial proportion of these bonds. As such the potential impact of this exchange on the financial sector has been assessed by their respective regulators.
“Working together, these regulators have pout in place appropriate measures and safeguards to minimize the potential impact on the financial sector and to ensure that financial stability is preserved.
“A Financial Stability Fund is being established by government with the help of development partners to provide liquidity support to banks, pension funds, insurance companies, fund managers and collective investment schemes to ensure that they are able to meet their obligations to clients as they fall due,” quipped the Finance Minister.
Source: norvanreports.com
