There are no plans by the government to conduct another round of Domestic Debt Exchange Programme (DDEP) targeted at pension funds, the Minister of Finance, Ken Ofori-Atta, has said.
Speaking during a virtual engagement with the country’s external creditors on the macroeconomic update on the economy on Thursday from Washington DC, monitored by the Ghanaian Times, he assured that government had not planned to carry out any second round of DDEP programme on pension funds.
His assurance was in reaction to media reports that the Ministry of Finance had assured Eurobond investors of another round of DDEP.
Mr Ofori-Atta said his statement was taken out of context when he provided explanation to the external creditors, saying it was a “misunderstanding.”
“We’re not planning a second round of the DDEP with pension funds. I think it was a misunderstanding,” the Finance Minister stated.
He said in the Memorandum of Understanding (MoU) signed with Organised Labour Associations on December 22, 2022, pension funds were exempted from the DDEP and that had not changed.
“Therefore, it is not correct to state that there will be second round of DDEP with Pension Funds. What we are doing is working with them on how they can further help government to reduce the debt servicing and ensure we maintain sort of the debt sustainability in the MoU agreement and so such discussions are continuing,” Mr Ofori-Atta stated.
The Finance Minister said per the MoU, the government and Organised Labour agreed that they would work together to explore mutually beneficial options with debt sustainability limits and to also promote macroeconomic stability and economic recovery in the spirit of social partnership.
Earlier in the engagement with the external creditors, Mr Ofori-Atta appealed to them to support the country’s debt restructuring exercise to help Ghana on the back of debt sustainability.
He said the objective of government was to bring Debt to Gross Domestic Ratio to 55 per cent in 2028 from the current figure estimated at more than 85 per cent.
Mr Ofori-Atta explained that the government resorted to an International Monetary Fund Programme in July last year for balance of payment support of $3 billion following debt sustainability analysis which showed that the country’s level of debt was unsustainable.
The Finance Minister said the government reached a Staff Level Agreement with the IMF in record time on December 12, 2022.
Mr Ofori-Atta said the government had already implemented some measures to increase revenue and rein in the growing expenditure including the hike in electricity and water tariffs and a comprehensive set of structural reforms, notably public expenditure review and monetary policy tightening.
The Finance Minister told the external creditors that government had completed the restructuring of the country’s domestic debt to bring some financial relief to government and the outstanding issues of three revenue bills had been passed into law to raise about GH¢4 billion into the national kitty.
BY KINGSLEY ASARE
