Ghana eyes bond market return after GH¢41 billion DDEP payments

Ghana is preparing to return to the domestic bond market for medium-and long-term borrowing, with government targeting GH¢17 billion in bond issuances this year after paying more than GH¢41 billion to holders of restructured domestic debt.

The planned issuance forms part of government’s 2026–2029 Medium-Term Debt Management Strategy and follows, the expiration in March of restrictions that prevented the state from issuing new domestic bonds following the Domestic Debt Exchange Programme (DDEP).

Government last week paid GH¢10.82 billion to DDEP bondholders, bringing total payments since 2025 to GH¢41.36 billion.

The latest payment, covering the third DDEP coupon, was settled fully in cash and on schedule.

The Ministry of Finance said the payment covered GH¢9.71 billion in DDEP interest and GH¢1.11 billion in principal to bondholders.

Government transferred GH¢9.7 billion into the Debt Service Recovery Cedi Account as part of measures to provide for subsequent DDEP obligations.

Government is also preparing to reduce its reliance on short-term Treasury bills by returning to medium- and long-term domestic bond issuance.

Under the debt strategy, government plans to issue GH¢17 billion in domestic bonds in 2026, followed by another GH¢19 billion in 2027, with part of the financing expected to support the build-up of resources for upcoming debt maturities.

The planned return follows three years in which government’s domestic borrowing has been concentrated largely in the Treasury-bill market after the debt restructuring disrupted activity in longer-dated government securities.

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Restrictions imposed under the DDEP prevented government from issuing new domestic bonds for three years.

The restrictions expired in March 2026, clearing the way for the Ministry of Finance to resume longer-term issuance.

The Ministry said following the expiration that government would use the opportunity to reduce its reliance on Treasury bills and rebuild the domestic bond market.

Government expects GH¢39.6 billion in principal repayments and GH¢18.8 billion in interest payments in 2027, taking domestic debt-service obligations for the year to approximately GH¢58.4 billion.

Another GH¢39 billion in principal and GH¢14 billion in interest is projected to fall due in 2028, bringing the year’s obligations to about GH¢53 billion.

Combined, government faces approximately GH¢111.4 billion in domestic principal and interest payments in 2027 and 2028.

The Ministry plans to build up the Sinking Fund ahead of the maturities rather than rely entirely on borrowing when the obligations fall due.

Under the Medium-Term Debt Management Strategy, seven percent of gross domestic non-oil tax revenue will be transferred monthly into the Sinking Fund Cedi Account.

Government expects the arrangement to generate about GH¢16 billion in 2026 and GH¢20 billion in 2027.

The planned GH¢17 billion domestic bond issuance this year and GH¢19 billion issuance in 2027 will also form part of government’s financing arrangements for the period.

The Ministry expects the strategy to improve the maturity structure of domestic debt and reduce the refinancing risks associated with the concentration of government borrowing in short-term instruments.

Treasury bills have remained government’s principal source of domestic market financing since the DDEP, with the state raising funds mainly through 91-day, 182-day and 364-day securities.

A return to bonds would allow the government to raise part of its financing over longer periods and spread future maturities beyond the current short-term borrowing cycle.

In March, Finance Minister Dr Cassiel Ato Forson held government’s first investor town hall since 2021, where the Ministry presented its fiscal and debt-management programmeto banks, investors and other market participants.

The engagement also focused on government’s plans for managing the large debt maturities expected from 2027.

The latest DDEP settlement adds to payments made since government began servicing the restructured securities in 2025 and comes as the Ministry seeks to demonstrate its ability to meet the revised payment schedule.

Restoring longer-dated securities could also begin rebuilding Ghana’s domestic yield curve, which was disrupted by the restructuring and the subsequent absence of new government bond issuance.

The cost at which government returns to the market will remain an important consideration, particularly as it seeks to lengthen debt maturities without significantly increasing interest costs.

Government’s debt strategy therefore provides for a gradual re-entry into medium-and long-term issuance alongside continued use of Treasury bills and measures to improve trading and liquidity in the secondary bond market.

The GH¢17 billion planned for 2026 will provide the first major test of investor appetite for new longer-dated government securities since the DDEP.

With GH¢41.36 billion already paid to restructured bondholders and more than GH¢111 billion in domestic debt obligations due across 2027 and 2028, government’s ability to successfully reopen the longer-term bond market will be central to how it finances the next phase of Ghana’s post-restructuring debt programme.