GH-D-04: 2022 Domestic Debt Exchange and the IMF Programme

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1. Key Takeaways

  • The 5 December 2022 Domestic Debt Exchange Programme (DDEP) was the most-extensive sovereign-domestic-debt restructuring in sub-Saharan African history. The Programme covered approximately ₵137 billion of domestic-currency-denominated bonds held by individual investors, pension funds, banks, insurance companies, and the Bank of Ghana; the original-terms proposed zero-coupon bonds in 2023, gradually rising to 5–10 per cent coupons by 2025–2027, with tenors extending to 2032 and 2033 and partial-principal haircut on selected categories.

  • The 19 December 2022 Ministry of Finance announcement of the suspension of debt-service payments on certain external-commercial debt (Eurobonds, commercial loans, the bilateral debt of the non-Paris-Club commercial creditors) was the formal declaration of the post-2022 sovereign-debt crisis. The cumulative fiscal-architecture had reached approximately 88 per cent debt-to-GDP by November 2022; the cedi had depreciated from ¢6.10/USD (January 2022) to ¢14.50/USD (November 2022, a 58 per cent nominal depreciation in eleven months); headline inflation had reached 54.1 per cent (December 2022).

  • The DDEP final-terms (announced 14 February 2023) included exemptions for individual bondholders below specified thresholds; modified-terms for pension funds (which had threatened to withhold consent); a continued exemption for the Bank of Ghana's holdings. The Programme achieved approximately 85 per cent participation among eligible bondholders and produced an interest-savings stream of approximately ₵61 billion through the 2024–2027 period. The principal political-economic-cost was the distributional incidence on individual savers, pension fund beneficiaries, and financial-sector institutions whose recapitalisation costs were absorbed by the Government of Ghana through the Ghana Financial Stability Fund.

  • The 17 May 2023 IMF Executive Board approval of a 36-month USD 3 billion Extended Credit Facility arrangement was the third IMF programme of post-2010 Ghanaian fiscal-policy. The Programme was structured around three pillars: fiscal consolidation aimed at restoring debt sustainability; structural reforms to enhance domestic revenue mobilisation and reduce expenditure rigidities; exchange-rate-and-monetary-policy reforms to anchor inflation expectations. Quantitative performance criteria included a primary-balance commitment to a fiscal surplus of 0.5 per cent of GDP for FY 2024 (the first primary surplus since 2014).

  • The external debt restructuring proceeded in two phases. The bilateral-debt phase, conducted under the G20 Common Framework, produced a Memorandum of Understanding with the Official Creditor Committee (co-chaired by China and France) on 12 January 2024 and a final agreement on 11 June 2024. The MOU covered approximately USD 5.4 billion of bilateral debt with restructuring terms providing for tenor extension, partial principal haircut, and reduced interest rates. The commercial-debt phase covered approximately USD 13.1 billion of Eurobonds; the Exchange Offer launched in October 2024 closed in early November 2024 with approximately 95 per cent participation.

  • The Eurobond Exchange terms produced principal haircut of approximately 37 per cent; new instruments at coupons ranging from 5 per cent to 6.4 per cent; tenor extensions to 2030 and beyond. The completion of the external debt restructuring before the 7 December 2024 election was the Akufo-Addo administration's signature pre-election fiscal-policy achievement; the political-economic interpretation of the timing has been contested.

  • The macroeconomic recovery through the IMF programme period showed substantial improvement on multiple indicators. Headline inflation declined from 54.1 per cent (December 2022) to 23.2 per cent (December 2023) to 23.8 per cent (November 2024); the cedi stabilised in the ¢14.0–¢15.5/USD range through 2023 and 2024; gross international reserves recovered to USD 8.9 billion (October 2024); the primary fiscal balance moved from a 4.3 per cent of GDP deficit (FY 2022) to a 0.3 per cent surplus (FY 2024 outturn). The Bank of Ghana's monetary-policy rate was eased modestly from a peak of 30.0 per cent (March 2023) to 27.0 per cent (November 2024).

  • The recovery's cumulative political-economic-effect was insufficient to recover the political-credibility lost during the 2022 collapse. The cumulative price-level increase between 2021 and 2024 of approximately 130 per cent on the headline CPI was substantially un-recovered by nominal-wage adjustments. The household-survey-data through 2024 indicated continuing real-income compression. The 2024 election (GH-E-01) produced the most decisive electoral repudiation of an incumbent governing party in Fourth-Republic Ghanaian history; the cumulative-DDEP-and-IMF-programme experience was the principal causal factor.

  • The DDEP's distributional incidence has been the most contested element. The Pensioners Association of Ghana, the Financial Stability Concerned Citizens Coalition, and broader-civil-society commentary characterised the DDEP as an "internal default" violating the implicit-contract between the state and its retail creditors. The Ministry of Finance position was that the DDEP was the minimum-restructuring necessary under the IMF-programme conditionality and that selected protections (the individual-bondholder threshold; the modified-pension-fund terms) addressed the most-concerning distributional incidence. The post-2024 Mahama administration has continued to engage the post-DDEP distributional questions.

  • Three contested-record questions structure the assessment. First, whether the DDEP terms produced an appropriate-balance between fiscal-restructuring and distributional-protection. Second, whether the post-DDEP IMF programme has produced durable-fiscal-recovery or whether the post-2025 trajectory will require additional-restructuring. Third, whether the post-2024 Mahama administration's continuation of the IMF programme is the appropriate-policy-trajectory or whether more-aggressive renegotiation should have been pursued.

2. The Pre-Crisis Configuration

2.1 The Post-2017 Macroeconomic Trajectory

The pre-2022 Ghanaian macroeconomic trajectory had been characterised by: post-COVID fiscal expansion (FY 2020 budget deficit reaching 11.7 per cent of GDP); pre-COVID Eurobond reliance (Ghana issued Eurobonds annually 2013–2021, with the 2021 issuance at USD 3.025 billion); post-2022 global tightening cycle that closed Eurobond access; cumulative cedi depreciation cascade.

Total public debt rose from USD 41.4 billion (December 2020) to USD 50.2 billion (December 2021) to USD 55.0 billion (October 2022, approximately 88 per cent of GDP). The combination produced acute fiscal-pressure through 2022 that culminated in the December 2022 debt-service suspension.

2.2 The Pre-Programme Negotiations

The pre-IMF-programme negotiations through Q3 2022 included: the July 2022 Akufo-Addo address committing to seek IMF support; the July–November 2022 selected staff-level engagement; the November 2022 Bank of Ghana announcement of selected-FX-and-monetary-policy modifications; the December 2022 announcements of the DDEP and the debt-service suspension.

3. The Domestic Debt Exchange Programme

3.1 The 5 December 2022 Launch

The DDEP was launched on 5 December 2022 with original terms covering approximately ₵137 billion of bonds. The original-terms-proposal had four principal elements:

  • Zero-coupon bonds for FY 2023; gradually rising to 5–10 per cent coupons by 2025–2027;
  • Tenors extending to 2032 and 2033;
  • Partial-principal haircut on selected categories;
  • Selected-exemptions for individual-bondholders below specified thresholds.

The launch produced acute civil-society-and-bondholder response. The Pensioners Association of Ghana and selected other organisations mobilised against the original terms; the Ghana Bondholders Forum negotiated selected modifications through December 2022 – February 2023.

3.2 The Negotiated Final Terms

The final-terms (announced 14 February 2023) modified the original-terms in selected categories:

  • Individual-bondholder exemptions: bondholders with holdings below specified thresholds (initially ₵25,000; subsequently raised) were exempt from the Programme;
  • Pension-fund modifications: pension funds received modified-terms with reduced-haircut and selected coupon-protection;
  • Financial-sector recapitalisation: a Ghana Financial Stability Fund was established to address the financial-sector recapitalisation costs;
  • Selected-other modifications: addressing specific-category concerns.

The final-terms produced approximately 85 per cent participation among eligible bondholders. The interest-savings stream of approximately ₵61 billion through the 2024–2027 period was the principal fiscal-output of the Programme.

3.3 The Distributional Incidence

The DDEP's distributional incidence has been the principal contested-element. The cumulative cost across categories included: individual savers (approximately 70,000 individuals affected, with cumulative real-loss estimates of approximately ₵5–8 billion); pension-fund beneficiaries (cumulative pension-replacement-rate impact estimated at 5–8 per cent reduction); financial-sector institutions (cumulative recapitalisation cost approximately ₵12 billion); the Government of Ghana itself (the cumulative-Ghana-Financial-Stability-Fund commitment).

4. The IMF Extended Credit Facility

4.1 The 17 May 2023 Programme Approval

The IMF Executive Board approved the 36-month USD 3 billion ECF on 17 May 2023, with an immediate first tranche of USD 600 million. The Programme's three-pillar structure was described in Section 1.

4.2 The Quantitative Performance Criteria

The QPC framework included: primary-balance commitment to a 0.5 per cent of GDP surplus for FY 2024 (the first primary surplus since 2014); non-financial public-sector borrowing-requirement ceiling; net international reserves accumulation target; selected other criteria. The post-2023 Programme reviews have produced cumulative tranche-disbursement of approximately USD 2.4 billion through the Fourth Review (April 2025).

4.3 The Structural Reform Agenda

The Programme's structural-reform agenda included: revenue-mobilisation reforms (the 2023 VAT modifications; selected other-tax-architecture refinements); expenditure-rigidity reduction (selected wage-bill discipline; the post-2023 SOE-architecture reform); the social-spending floor framework that protected expenditure on the National Health Insurance Scheme, the Livelihood Empowerment Against Poverty programme, and other identified pro-poor expenditures.

5. The External Debt Restructuring

5.1 The G20 Common Framework Phase

The bilateral-debt restructuring under the G20 Common Framework was conducted through 2023–2024. The Official Creditor Committee, co-chaired by China and France, included Paris Club members and the major non-Paris-Club bilateral creditors. The 12 January 2024 MOU and the 11 June 2024 final agreement covered approximately USD 5.4 billion of bilateral debt.

The G20 Common Framework's application to Ghana was the second case under the Framework (after Zambia) to reach completion; the Framework's procedural-architecture has been the subject of substantial international-financial-policy commentary on the post-COVID sovereign-debt-restructuring architecture.

5.2 The Eurobond Exchange Phase

The commercial-debt restructuring was conducted through extended negotiations with the Bondholder Steering Committee through 2023–2024. The October 2024 Exchange Offer was launched after multi-month negotiations between the Ministry of Finance, the financial advisers (Lazard, Hogan Lovells), and the Bondholder Steering Committee.

The Exchange terms: principal haircut of approximately 37 per cent; new instruments at coupons ranging from 5 per cent to 6.4 per cent; tenor extensions to 2030 and beyond. The Exchange closed in early November 2024 with approximately 95 per cent participation; the new instruments were issued in late November 2024, two weeks before the 7 December election.

6. The Macroeconomic Recovery

6.1 Inflation Moderation

Headline inflation declined from 54.1 per cent (December 2022) to 23.2 per cent (December 2023) to 23.8 per cent (November 2024); food inflation showed similar trajectory. The post-2022 disinflation was substantially-driven by: the cumulative cedi-stabilisation (reducing imported-inflation pressure); the post-2023 monetary-policy positioning under Bank of Ghana Governor Ernest Addison; the broader post-IMF-programme stabilisation environment.

6.2 Fiscal Trajectory

The primary fiscal balance moved from a 4.3 per cent of GDP deficit (FY 2022) to a 0.3 per cent surplus (FY 2024 outturn) — the first primary surplus since 2014. The cumulative fiscal-recovery has been the principal Programme-quantitative-success; the cumulative debt-stabilisation through 2024 has been substantial.

6.3 The Recovery's Political-Economic Insufficiency

The recovery's cumulative political-economic-effect was insufficient to recover the political-credibility lost during the 2022 collapse. The cumulative price-level increase between 2021 and 2024 of approximately 130 per cent had compressed real-incomes substantially; the household-level political-economic-experience continued to dominate the political-coalition environment through the 2024 election cycle.

7. The Contested Record

7.1 The DDEP-Distributional-Incidence Question

Three positions:

  • Distributional-protection-adequate position (Akufo-Addo administration, IMF, selected economic-policy commentary): the DDEP's selected protections (individual-bondholder threshold; pension-fund modifications) addressed the most-concerning distributional incidence. Further-protections would have undermined the fiscal-restructuring's adequacy.
  • Distributional-protection-inadequate position (Pensioners Association, Financial Stability Concerned Citizens Coalition): the DDEP's distributional-incidence was substantively-inappropriate for the retail-and-pension-beneficiary categories. More-extensive-protections should have been pursued.
  • Mixed-assessment position: both fiscal-restructuring-need and distributional-protection-concerns were operative; the eventual-policy-trade-off was substantially-conditioned by the IMF-programme-conditionality.

7.2 The IMF-Programme-Continuation Question

The post-2024 Mahama administration's continuation of the IMF programme has been broadly-endorsed by the IMF and most economic-policy commentary; selected critical commentary has argued for more-aggressive renegotiation. The post-2025 Programme-completion trajectory will produce evidence on the appropriate-trajectory.

7.3 The Pre-Election-Restructuring-Timing Question

The completion of the external debt restructuring two weeks before the 7 December 2024 election was the Akufo-Addo administration's signature pre-election fiscal-policy achievement. The post-event commentary has produced contested interpretations: as a substantive economic-policy achievement; as a strategically-timed political-signal; as both. The post-2024 academic-commentary has produced extensive engagement with the timing question.

8. Conclusion — The 2022–2024 Crisis-and-Recovery as Foundational Architecture

The 2022–2024 sovereign-debt-crisis-and-recovery trajectory was the most-consequential single Ghanaian economic-policy event of the post-2010 period and the foundational economic-policy-architecture conditioning the December 2024 Mahama election. The cumulative trajectory — combining the December 2022 DDEP, the May 2023 IMF programme, the June 2024 G20 Common Framework agreement, and the November 2024 Eurobond Exchange — produced the post-2024 economic-policy-environment that the Mahama administration has inherited.

Three structural questions will determine the long-term verdict on the trajectory.

First, whether the post-DDEP IMF-programme produces durable-fiscal-recovery through the post-2025 period or whether the post-2025 trajectory will require additional-restructuring.

Second, whether the post-2024 Mahama administration's continuation of the Programme produces durable-political-economic-stabilisation or whether the post-2025 cumulative political-coalition pressure produces selective-modification.

Third, whether the cumulative-DDEP-distributional-incidence produces durable post-2024 political-coalition pressure or whether the post-2025 trajectory produces stabilisation.

This document, written in the post-2024 Mahama administration period and approximately 30 months after the December 2022 DDEP launch, records the cumulative crisis-and-recovery, the IMF programme implementation, the external debt restructuring, and the contested-record as they have crystallised through mid-2025.

End of document. Status: DRAFT. Cross-references: 3 forward-and-back. Symmetry pass pending until GH-D-03, GH-E-03 are written.

Sources

  1. Ministry of Finance, Republic of Ghana, Domestic Debt Exchange Programme — Programme Memorandum, 5 December 2022.
  2. Ministry of Finance, Domestic Debt Exchange Programme — Final Results Statement, 14 February 2023.
  3. International Monetary Fund, Ghana — Request for an Extended Credit Facility Arrangement, IMF Country Report No. 23/168, May 2023.
  4. International Monetary Fund, Ghana — First, Second, Third, Fourth Reviews Under the ECF, successive IMF Country Reports 2023–2025.
  5. Ministry of Finance, External Debt Restructuring — Memorandum of Understanding with Official Creditor Committee, 11 June 2024.
  6. Ministry of Finance, Eurobond Exchange Offer Memorandum, October 2024.
  7. Bank of Ghana, Monetary Policy Committee Statements 2022–2025.
  8. Ghana Statistical Service, Consumer Price Index Reports 2022–2025.
  9. President Nana Akufo-Addo, Address to the Nation on the IMF Programme, July 2022.
  10. Africa Confidential, archive coverage of Ghana 2022–2024.
  11. Daily Graphic, archive coverage 2022–2024.
  12. Joy News / Joy FM, broadcast archive coverage.
  13. Citi News / Citi FM, broadcast archive coverage.
  14. Pensioners Association of Ghana, public statements 2022–2023.
  15. Imani Centre for Policy and Education, DDEP analysis 2022–2024.
  16. Africa Centre for Energy Policy (ACEP), DDEP and IMF analysis 2022–2024.
  17. Ghana Bondholders Forum, public statements 2022–2024.
  18. International Crisis Group, Ghana briefings 2022–2024.
  19. World Bank, Ghana Economic Updates 2022–2024.
  20. CFR Africa in Transition, Ghana entries 2022–2024.
  21. Brookings Africa Growth Initiative, Ghana commentary.
  22. Eurobond Bondholders Steering Committee, public statements 2024.
  • GH-D-03: Nana Akufo-Addo Presidency (era parent)
  • GH-E-01: 7 December 2024 Election (sequel)
  • GH-E-03: Post-IMF Recovery (sequel)
  • GH-B-01: Rawlings Era (1979-2001) — back-reference added by symmetry sweep
  • GH-R-01: Ghana Governance Books Canon
  • GH-D-01: Mills-Mahama Presidencies (2009-2017)
  • GH-D-02: 2022 Domestic Debt Exchange and IMF Programme
  • GH-E-02: John Mahama's Second Presidency: 24-Hour Economy, Reset Cabinet, and the First Hundred Days of Recovery (January–April 2025)
  • GH-F-01: Ghanaian Foreign Policy from Nkrumah's Pan-Africanism to the ECOWAS–AES Rupture (1957–2025)
  • GH-O-02: ghana democratic alternation 1992 2025 and the ndc npp system
  • GH-E-04: Mahama Year 1 mid-term fiscal Reset agenda
  • GH-C-01: back-reference added by symmetry sweep
  • GH-G-01: Ghana's Social Policy — The NHIS, Free SHS, and the Welfare-State Experiment
  • GH-B-02: back-reference added by symmetry sweep
  • GH-H-PRES-03: John Agyekum Kufuor — A Biography
  • GH-H-PRES-05: John Dramani Mahama — A Biography
  • GH-H-PRES-06: Nana Addo Dankwa Akufo-Addo — A Biography
  • GH-B-03: The Provisional National Defence Council (PNDC) Rule — Rawlings's Eleven-Year Revolution and the Path to the Fourth Republic
  • GH-C-02: The Acheampong–Akuffo–Limann Era — NRC, SMC, AFRC, and the Third Republic
  • GH-D-05: Akufo-Addo Year One — The 7 January 2017 Inauguration, the Free SHS Launch, the Bauxite-for-Sinohydro Decision, Planting for Food and Jobs, and the Office of the Special Prosecutor
  • GH-F-02: Ghana–China Bauxite-for-Infrastructure and the Belt and Road Initiative
  • GH-D-06: Mahama Year Two (January 2026 – January 2027) — Fiscal Recovery, 24-Hour Economy Implementation, and the 2028 Mid-Term Test
  • GH-D-07: Akufo-Addo Second Term 2021–2024 — Cedi Crisis, DDEP, and the Path to 2024 Defeat
  • GH-J-02: The Galamsey Illegal Mining Crisis — Three Accounts
  • GH-G-02: Cocoa Political Economy — COCOBOD and the Farmer-State Bargain
  • GH-K-02: The 2017 Free SHS Decision and Its Fiscal Politics
  • GH-O-01: Ghana Megatrends — The 2030s Questions
  • GH-G-03: Ghana's Power Sector — Dumsor and the IPP Debt Trap
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