Accra: Ghana is preparing to return to the domestic bond market for medium- and long-term borrowing, with the government targeting GHS17 billion in bond issuances this year after paying more than GHS41 billion to holders of restructured domestic debt. The planned issuance forms part of the government's 2026-2029 Medium-Term Debt Management Strategy and follows the expiration in March of restrictions that had prevented the state from issuing new domestic bonds following the Domestic Debt Exchange Programme (DDEP).
According to Ghana Web, the government last week paid GHS10.82 billion to DDEP bondholders, bringing total payments since 2025 to GHS41.36 billion. The latest payment, covering the third DDEP coupon, was settled fully in cash and on schedule. The Ministry of Finance stated that the payment covered GHS9.71 billion in DDEP interest and GHS1.11 billion in principal to bondholders. The government transferred GHS9.7 billion into the Debt Service Recovery Cedi Account as part of measures to provide for subsequent DDEP obligations.
Government is also preparing to reduce its reliance on short-term Treasury bills by returning to medium- and long-term domestic bond issuance. Under the debt strategy, the government plans to issue GHS17 billion in domestic bonds in 2026, followed by another GHS19 billion in 2027, with part of the financing expected to support the build-up of resources for upcoming debt maturities.
Restrictions imposed under the DDEP prevented the government from issuing new domestic bonds for three years. The restrictions expired in March 2026, clearing the way for the Ministry of Finance to resume longer-term issuance. The Ministry said following the expiration that the government would use the opportunity to reduce its reliance on Treasury bills and rebuild the domestic bond market.
Government expects GHS39.6 billion in principal repayments and GHS18.8 billion in interest payments in 2027, taking domestic debt-service obligations for the year to approximately GHS58.4 billion. Another GHS39 billion in principal and GHS14 billion in interest is projected to fall due in 2028, bringing the year's obligations to about GHS53 billion. Combined, the government faces approximately GHS111.4 billion in domestic principal and interest payments in 2027 and 2028.
The Ministry plans to build up the Sinking Fund ahead of the maturities rather than rely entirely on borrowing when the obligations fall due. Under the Medium-Term Debt Management Strategy, seven percent of gross domestic non-oil tax revenue will be transferred monthly into the Sinking Fund Cedi Account. Government expects the arrangement to generate about GHS16 billion in 2026 and GHS20 billion in 2027.
The planned GHS17 billion domestic bond issuance this year and GHS19 billion issuance in 2027 will also form part of the government's financing arrangements for the period. The Ministry expects the strategy to improve the maturity structure of domestic debt and reduce the refinancing risks associated with the concentration of government borrowing in short-term instruments.
Treasury bills have remained the government's principal source of domestic market financing since the DDEP, with the state raising funds mainly through 91-day, 182-day, and 364-day securities. A return to bonds would allow the government to raise part of its financing over longer periods and spread future maturities beyond the current short-term borrowing cycle.
In March, Finance Minister Dr. Cassiel Ato Forson held the government's first investor town hall since 2021, where the Ministry presented its fiscal and debt-management programme to banks, investors, and other market participants. The engagement also focused on the government's plans for managing the large debt maturities expected from 2027.
The latest DDEP settlement adds to payments made since the government began servicing the restructured securities in 2025 and comes as the Ministry seeks to demonstrate its ability to meet the revised payment schedule. Restoring longer-dated securities could also begin rebuilding Ghana's domestic yield curve, which was disrupted by the restructuring and the subsequent absence of new government bond issuance.
The cost at which the government returns to the market will remain an important consideration, particularly as it seeks to lengthen debt maturities without significantly increasing interest costs. The government's debt strategy, therefore, provides for a gradual re-entry into medium- and long-term issuance alongside continued use of Treasury bills and measures to improve trading and liquidity in the secondary bond market.
The GHS17 billion planned for 2026 will provide the first major test of investor appetite for new longer-dated government securities since the DDEP. With GHS41.36 billion already paid to restructured bondholders and more than GHS111 billion in domestic debt obligations due across 2027 and 2028, the government's ability to successfully reopen the longer-term bond market will be central to how it finances the next phase of Ghana's post-restructuring debt programme.