The New Patriotic Party (NPP) government has remained steadfast in its commitment to meeting the country’s financial obligations, particularly after the restructuring of domestic debts. Former Finance Minister, Dr. Mohammed Amin Adam, has made it clear that under the NPP administration, the government never defaulted on coupon payments, even as the country worked through its complex debt restructuring process.
The importance of these payments cannot be overstated, as they ensure the stability and confidence of bondholders and investors in Ghana's financial system. Dr. Amin Adam’s recent remarks provide detailed insight into how the NPP government navigated these challenges and laid the groundwork for future debt service obligations.
The NPP Government’s Successful Debt Service Record
Since the domestic debt restructuring, the NPP government managed to meet all coupon payment obligations—ensuring that bondholders were compensated promptly and in full. Dr. Amin Adam explained that significant buffers were created in the Debt Reserves Accounts, providing a cushion for upcoming debt service obligations, such as the important 4th coupon payment due in February 2025.
Under the NPP administration, a total of GHS17.25 billion was paid in Payment-In-Cash (PIC), alongside Payment-In-Kind (PIK) deposits totaling GHS9.77 billion. This was done in line with the government’s commitment to honoring the restructuring agreements made with bondholders.
For individual bondholders who chose not to tender their bonds, the government still honored its promises by paying a total of GHS515.17 million in coupons between 2023 and 2024. This was done according to the Memorandum of Understanding (MoU) signed between the government and the Coalition of Individual Bondholders, ensuring that no one was left behind in the restructuring process.
A Breakdown of Payments
To further understand the scale of these payments, here’s a detailed breakdown of the NPP government’s debt servicing between August 2023 and December 2024:
1st Payment (August 2023): A total payment of GHS8.55 billion was made, comprising GHS5.42 billion in PIC and GHS3.13 billion in PIK deposits.
2nd Payment (February 2024): A total of GHS9.11 billion was paid, including GHS5.85 billion in PIC and GHS3.27 billion in PIK deposits.
3rd Payment (August 2024): GHS9.35 billion was disbursed, with GHS5.98 billion in PIC and GHS3.38 billion in PIK deposits.
These efforts show that despite the challenges posed by the debt restructuring, the NPP government remained proactive, ensuring that bondholders were paid on time. The establishment of a Debt Reserves Account also demonstrated foresight in addressing upcoming debt obligations.
The Mahama Administration’s Continued Effort
As we move into 2025, the current administration, under President John Dramani Mahama, is continuing this legacy of debt management. A recent statement by Felix Kwakye Ofosu, Minister for Government Communications, confirmed that the Mahama-led government had honored the 4th coupon payment due on February 18, 2025, amounting to GHS6.081 billion to all DDEP bondholders.
This payment serves as another reminder of the government’s commitment to restoring confidence in Ghana’s economy. The successful settlement of this payment shows that, despite political differences, both administrations share the same goal—keeping the financial system stable and fulfilling Ghana's international and domestic obligations.
The NPP government’s handling of Ghana's domestic debt restructuring serves as a critical chapter in the country's financial history. With Dr. Amin Adam's leadership, buffers were created, and the government ensured that all payments were made on time, even in challenging circumstances. The Mahama administration's continued efforts in honoring the 4th coupon payment reinforce the commitment to economic stability.
As Ghana moves forward, it’s essential for the government to keep fostering a favorable environment for investment and continue to prioritize the interests of bondholders. With a foundation of responsibility and financial discipline, Ghana's economic recovery is well within reach.
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