Government reaches agreement with banks on new terms for debt exchange program

The Government of Ghana and the Ghana Association of Banks (GAB) have made significant progress on the terms for the participation of Banks in the Domestic Debt Exchange Program (DDEP).

In a joint statement issued on Monday, January 23, 2023, from the Finance Ministry and GAB, the new agreement encompasses final improvements to the terms of the programme.

These include; an agreement to pay 5% coupon for 2023 and a single coupon rate for each of the twelve (12) new bonds resulting in an effective coupon rate of 9%; clarity on the operational framework and terms of access to the Ghana Financial Stability Fund (GFSF); and the removal or amendment of all clauses in the Exchange Memorandum that empowers the Republic to, at its sole discretion, vary the terms of the Exchange.

The GAB said per the new terms, the participation of member banks is subjected to individual bank’s internal governance and approval processes.

However, GAB said member bank’s participation in any case should not be later than the deadline date of January 30.

“This is a significant milestone towards addressing our economic challenges, and will thus help to restore macro-economic stability and accelerate Ghana’s economic growth. With this achievement, the Government of Ghana reiterates its commitment to concluding the DDEP in time with all other stakeholders,” the statement added.