Introduction
Ghana’s payment of GH¢10.82 billion to Domestic Debt Exchange Programme bondholders on 19 August 2026 is not merely another coupon payment. It is the newest chapter in a debt story stretching almost seven decades.
The Government paid exactly GH¢10,816,840,318.26, fully in cash and on schedule, taking DDEP payments since 2025 to GH¢41.36 billion. The settlement represents the third coupon payment made entirely in cash.
Yet the DDEP was not Ghana’s first encounter with debt distress. Since independence, successive governments have used creditor rescheduling, austerity, structural adjustment, debt forgiveness, IMF programmes and fiscal consolidation to confront recurring debt pressures. The difference in 2022 was that the crisis had penetrated so deeply into the domestic financial system that Ghana had to restructure obligations held by its own banks, pension funds, insurers, institutions and citizens.
Ghana’s debt crises before the DDEP
| No. | Period | Critical Debt Situation | Government Response | Outcome and Lesson |
| 1 | 1965 to 1970 | Foreign debt approached US$700 million by the end of 1965 while reserves fell to about US$14 million, largely because of short-maturity suppliers’ credits | IMF support and creditor rescheduling agreements in 1966, 1968 and 1970 | Debt service was stretched over longer periods, demonstrating the danger of financing long-term development with short-term credit |
| 2 | 1972 to 1974 | Heavy inherited external obligations and continuing foreign exchange shortages | Government initially repudiated aspects of earlier arrangements, followed by negotiations and a new multilateral rescheduling agreement in 1974 | Unilateral action proved difficult to sustain, underlining the importance of negotiated creditor settlements |
| 3 | 1982 to 1991 | External payment arrears reached about US$580 million by end of 1982 amid collapsing output, inflation and foreign exchange shortages | Economic Recovery Programme from 1983, IMF and World Bank support, fiscal adjustment, currency reform and market liberalisation | Growth recovered and inflation declined substantially, although adjustment imposed high social costs |
| 4 | 2001 to 2006 | External debt reached US$5.9 billion by end 2000, and its net present value equalled 557 per cent of government revenue | Ghana adopted HIPC, reached the decision point in 2002 and completion point in 2004, followed by multilateral debt relief in 2006 | Ghana received about US$3.5 billion in nominal HIPC debt relief and external debt fell dramatically |
| 5 | 2014 to 2019 | Large deficits, rising interest expenditure, cedi depreciation and expensive domestic borrowing | Three-year IMF Extended Credit Facility of about US$918 million, fiscal consolidation and public financial management reforms | Stabilisation was achieved without restructuring domestic bonds, but underlying debt vulnerabilities remained |
| 6 | 2020 to 2022 | COVID-19, large fiscal deficits, rising interest costs, global tightening and loss of international market access | US$1 billion IMF emergency financing, domestic financing and eventually comprehensive debt restructuring | The accumulated pressures ultimately produced the DDEP |
Ghana’s first debt reckoning
The roots of Ghana’s sovereign debt problem appeared surprisingly early after independence. Rapid industrialisation and infrastructure development were financed substantially through foreign suppliers’ credits. By the end of 1965, the Government had undertaken 222 loan and credit commitments involving about US$870 million of projects. Foreign debt had risen from negligible levels in 1959 to almost US$700 million, while reserves were nearly exhausted.
Government consequently negotiated restructurings in 1966, 1968 and 1970. The first two arrangements reduced payments on affected suppliers’ credits during 1967 to 1970 to roughly one third of their original schedules.
The historical lesson remains relevant today: borrowing maturity must correspond with the time required for the financed investment to generate returns.
From structural adjustment to HIPC
By 1982, Ghana had accumulated about US$580 million in external payment arrears. The 1983 Economic Recovery Programme responded with fiscal discipline, exchange rate reform, trade liberalisation and support from international financial institutions. Inflation subsequently fell sharply, and economic growth recovered.
Debt pressures nevertheless reappeared. At the end of 2000, Ghana owed approximately US$5.9 billion externally, with the net present value of external debt equivalent to 557 percent of government revenue.
Ghana therefore opted for the Highly Indebted Poor Countries Initiative. By its 2004 completion point, approximately US$3.5 billion in nominal debt service relief had been secured. Subsequent multilateral relief helped reduce external debt substantially.
Unlike the DDEP, HIPC focused primarily on external official debt. The DDEP directly affected Ghana’s domestic financial ecosystem.
What finally produced the DDEP?
The 2022 crisis was the accumulation of old vulnerabilities and new shocks. Public debt rose from approximately 63 percent of GDP in 2019 to more than 90 percent by end 2022 under subsequent IMF assessments.
COVID-19 expanded fiscal deficits. Global monetary tightening increased financing costs. Russia’s invasion of Ukraine intensified commodity price pressures. The cedi depreciated, inflation accelerated, international capital markets effectively closed, and the government encountered increasing difficulty rolling over domestic bonds.
Debt servicing increasingly absorbed government revenues while domestic borrowing costs rose sharply.
The DDEP launched on December 5, 2022 was therefore less an invention of choice than an instrument of necessity.
It exchanged existing domestic securities for new bonds carrying lower coupons and longer maturities, thereby reducing near-term cash requirements and extending repayment obligations.
Has Ghana turned the corner?
There is measurable improvement.
| No. | Indicator | Position | Significance |
| 1 | August 2026 DDEP payment | GH¢10.82 billion | Strengthens sovereign repayment credibility |
| 2 | DDEP payments since 2025 | GH¢41.36 billion | Demonstrates improving repayment discipline |
| 3 | Public debt, June 2026 | GH¢719.5 billion | Debt management remains a major fiscal priority |
| 4 | Domestic debt, June 2026 | GH¢391.1 billion | Significant refinancing exposure remains |
| 5 | Inflation, July 2026 | 4.6 per cent | Supports purchasing power and real investment returns |
| 6 | First quarter 2026 GDP growth | 6.4 per cent | Strengthens government revenue and business prospects |
| 7 | Monetary Policy Rate | 14.0 per cent | Reflects significantly easier monetary conditions |
The GH¢41.36 billion paid to DDEP investors since 2025 is equivalent to approximately 10.6 percent of the June 2026 domestic debt stock.
But debt risk has not disappeared. Substantial DDEP maturities are expected in 2027 and 2028, creating another test of refinancing capacity and fiscal discipline.
Where should investors position capital?
| No. | Target | Investment Opportunities | Why It Matters in Turbulent Economies |
| 1 | Households | Affordable housing, healthcare, education, insurance and renewable energy | Essential household demand remains comparatively resilient |
| 2 | Businesses | Agribusiness, manufacturing, logistics, pharmaceuticals and technology | Generates employment, taxes and sustainable cash flows |
| 3 | Exporters | Agro processing, garments, tourism and digital services | Generates foreign exchange and limits domestic currency exposure |
| 4 | Government initiatives | Infrastructure, energy, transport, industrial parks and 24 Hour Economy projects | Enables investors to participate in national development without relying solely on sovereign lending |
| 5 | Financial markets | Private credit, SME finance, guarantees and infrastructure funds | Channels liquidity towards productive activity |
For investors, Ghana’s history suggests that capital should not be concentrated exclusively in sovereign securities. Stronger opportunities may increasingly emerge from productive sectors capable of generating sustainable cash flows.
What the history means for government
Ghana’s successive debt crises demonstrate that restructuring creates breathing space, not permanent solvency. Government must therefore maintain expenditure discipline, improve tax efficiency, expand exports and ensure that borrowed resources finance projects capable of producing measurable economic returns.
This is particularly important for initiatives such as the 24 Hour Economy, infrastructure programmes, industrial parks, agriculture and energy investments.
What it means for businesses and households
Businesses could benefit if declining sovereign financing requirements release more bank liquidity for private sector lending. Lower inflation and interest rates can also improve working capital planning and investment decisions.
Households stand to benefit through more stable prices, stronger pension fund portfolios, improved employment prospects and potentially lower borrowing costs.
However, households also bear the indirect cost of debt distress through taxation, inflation, weakened public services and lost economic opportunities. Sustainable debt management is therefore ultimately a household welfare issue.
Conclusion
From the suppliers’ credit crisis of the 1960s, through structural adjustment, HIPC, repeated IMF stabilisation programmes and finally the DDEP, Ghana’s economic history demonstrates that debt crises rarely emerge overnight. They accumulate when public obligations grow faster than national capacity to generate revenue, exports and productive economic returns.
The GH¢10.82 billion DDEP payment is therefore encouraging, but the true measure of success will not be the payment of one coupon.
It will be whether Ghana converts restored confidence into cheaper capital, productive businesses, stronger households, sustainable infrastructure and investments capable of generating tomorrow’s revenue.
The central lesson from Ghana’s debt history is enduring: restructuring can buy time, but only productivity, fiscal discipline and sustained economic growth can buy lasting debt sustainability.
By Prof. Samuel Lartey
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