Former President John Dramani Mahama has raised concerns over the intentions behind the Domestic Debt Exchange Programme (DDEP) orchestrated by the governor of the Bank of Ghana. The former president alleges that the DDEP is being used as a smokescreen to obscure the alleged mismanagement of the central bank. This comes after the Bank of Ghana recently explained that a significant portion of its losses in the 2022 financial results was attributed to the government’s domestic debt restructuring exercise, encompassing both the first and second phases.
The Bank of Ghana released a statement on Wednesday, shedding light on the financial losses it incurred. According to the statement, out of the GH¢60 billion losses reported in the 2022 financial results, GH¢53.1 billion were directly attributed to the government’s domestic debt restructuring initiative. This exercise, known as the domestic debt exchange (DDE), was a pivotal component of the corrective actions required to adhere to the stipulations of the International Monetary Fund (IMF) programme. The primary goal of the DDE was to halve the stock of government debt from 105 percent of the Gross Domestic Product (GDP) to 55 percent of GDP by 2028.
However, despite these intentions, the Bank of Ghana’s statement indicated that the targeted reduction to 55 percent of GDP was not met. The bank had to play a role in bridging the gap to allow Ghana to meet the debt threshold required for qualification in the IMF programme. The statement characterized the Bank of Ghana as acting as a “loss absorber” in this process.
Responding to this development, Former President John Dramani Mahama took to Facebook on August 10, 2023, to express his concerns. He accused the Finance Minister of damaging the economy while capitalizing on the circumstances created by the Covid-19 pandemic and the ongoing Ukraine/Russia conflict. In his Facebook post, he suggested that these events were being used as cover-ups to divert attention from alleged economic mismanagement.
Furthermore, Mahama directed his criticism towards the governor of the Bank of Ghana, implying that the DDEP was being employed to conceal the purported destruction of the Central Bank. This assertion raises questions about the transparency and effectiveness of the DDEP and its role in the broader economic landscape.
As Ghana navigates these financial challenges and works towards meeting its debt reduction goals, the allegations and concerns raised by Former President John Dramani Mahama shed light on the complexities of economic management and the need for accountability in government and financial institutions. The situation underscores the importance of clear communication, effective policies, and transparent decision-making in maintaining economic stability and public trust.
