Bondholders can now heave a sigh of relief as President John Dramani Mahama has assured them that they will soon receive their due payments.
During his State of the Nation Address in Parliament on Thursday, February 27, 2025, he disclosed that the government has created a sinking fund to settle all maturing bonds in July and August.
He stated, “We have also built a sinking fund to honor the maturing bonds that are due in July and August. Bondholders can rest assured that they will be paid every last pesewa owed to them.”
In February this year, President Mahama directed the Ministry of Finance to settle outstanding Domestic Debt Exchange Programme (DDEP) coupons and build a financial buffer through the sinking fund.
Following this directive, the Ministry of Finance disbursed a Payment-In-Cash (PIC) coupon of GH¢6.081 billion to all DDEP bondholders.
Additionally, a Payment-In-Kind (PIK) portion of GH¢3.46 billion has been credited to bondholders’ securities accounts, in accordance with the terms outlined in the DDEP Memorandum.
To further strengthen the country’s debt management strategy, the government has also deposited GH¢9.7 billion into the Debt Service Recovery Cedi Account (Sinking Fund).
This initiative is intended to serve as a buffer for the next five DDEP coupon payments due in July and August 2025.
It will be recalled that many Ghanaians who invested in bonds and other financial instruments suffered losses due to the government’s debt restructuring program.
This became a major concern, placing financial constraints on many investors, while others lamented the loss of the time value of their money.
The program affected securities dealers and funds, private banks and investment companies, insurance schemes, pension funds, and non-resident investors.
Background
President Mahama’s address, which is in line with the Article 67 of the 1992 Constitution, and which is expected to outline his ambitious “Resetting Ghana” agenda, aims at tackling economic challenges, creating jobs, and restoring stability.
In his address, the president is expected to touch on key areas of his government’s policy objectives.
He is also expected to provide updates on the state of Ghana’s economy, including the ongoing IMF bailout program, security, and the cost of living, among other issues.
Additionally, he will update Ghanaians on deliverables for the year ahead, as well as the achievements of his government so far and the challenges that lie ahead.
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SA/MA