Debt Exchange: A Breakdown Of Domestic Bond Holders


THE PUSH for exemption from the GH$137.3 billion domestic debt exchange programme by various groups has put the arrangement, which is critical to securing International Monetary Fund (IMF) bailout of the economy, in danger.

Looking at the amounts various players have in the domestic debt, the exemptions being demanded will make it almost impossible for the government to achieve its targeted 80 per cent threshold in the voluntary debt exchange programme.

The domestic bond exchange is to replace previously issued bonds with heavily discounted new bonds of lower value and this is what bondholders are fighting against.

The country and the International Monetary Fund (IMF) have reached staff-level agreement on economic policies and reforms to be supported by a new three-year arrangement under the Extended Credit Facility (ECF) of about $3 billion.

But, the IMF has made it clear that the board’s approval of the deal is contingent on a successful debt exchange programme.

The Annual Public Debt Report for the 2021 financial year put the total domestic debt at GH$181.3 billion (GH¢181,397.2 million).

According to the report, Ghanaians hold GH¢152.4 billion (GH¢152,401.9 million) of the domestic debt representing 84 per cent.

On the other hand, foreign investors are holding GH¢28.9 billion (GH¢28,995.3 million) of Ghana’s domestic debt, amounting to 16 per cent.

Out of the GH¢181.3 billion domestic debt, the banking sector alone accounts for GH$91 billion (GH¢91,032.2 million) representing 50.2 per cent.

A further break down of the banking sector’s component shows that the Bank of Ghana (BoG) is responsible for GH$35.8 billion (GH¢35,861.7) representing 19.8 per cent of the GH$181.3 billion domestic debt.

The report shows that Commercial Banks hold GH¢55.1 billion (GH¢55,170.5 million) which amounts to 30.4 per cent of the total domestic debt in 2021.

Per the report, Rural Banks also have some GH¢2 billion (GH¢2,006.7 million) representing 1.1 per cent of domestic debt.

On the other hand, the Non-Bank Sector has GH$61.3 billion (GH¢61,369.7 million) representing 33.8 per cent locked up in domestic debts.

According to the report, individual investors account for GH¢16.7 billion (GH¢16,717.6 million) which represents 9.2 per cent overall domestic debt.

Firms and institutions also hold GH¢41 billion (GH¢41,013.8 million) of the domestic debt which represents 22.6 per cent.

According to the data, insurance companies account for over GH¢1 billion (GH¢1,094.6 million) which amounts to 0.6% of the total domestic debt in 2021.

In respect of the Social Security and National Insurance Trust (SSNIT), it accounts for GH¢537.1 million constituting 0.3 per cent of overall domestic debt.