The government has made an initial deposit of GHS9.7 billion into the Debt Service Recovery Cedi Account, commonly known as the Sinking Fund, to cushion upcoming payments for the fifth Domestic Debt Exchange Programme (DDEP) coupon in July and August 2025.

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This move, aimed at easing debt servicing pressures, was announced in a statement on Monday, February 17, by Felix Kwakye Ofosu, Spokesperson to the President and Minister for Government Communications.

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Economists have long stressed the necessity of strengthening the Sinking Fund as a strategy to effectively manage Ghana’s restructured debt obligations. Given the country’s mounting debt stock, the fund serves as a critical tool to ensure timely repayment and ease financial strain.

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Before assuming office, President John Mahama had pledged to reintroduce the Sinking Fund as part of his administration’s debt management strategy. He outlined plans to finance the fund using provisions under the Petroleum Revenue Management Act, 2011 (ACT 815).

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Historically, Ghana successfully repaid a $750 million Eurobond issued in 2007 through the Sinking Fund, reinforcing its effectiveness in managing debt obligations. However, the previous administration discontinued the fund from 2017, a decision that former Finance Minister Seth Terkper criticized, arguing that it left the country vulnerable and overly reliant on the Stabilization Fund and Bank of Ghana interventions.

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Meanwhile, the Ministry of Finance has completed the Payment-In-Cash (PIC) component of GHS6.081 billion to all DDEP bondholders as of February 17, 2025. Additionally, the Payment-In-Kind (PIK) portion of GHS3.46 billion has been credited to bondholders’ securities accounts, in line with the DDEP Memorandum.

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“Through the 2025 Budget Statement, the government will introduce further measures to restore market confidence, prioritize spending, and enhance transparency and accountability in public finances,” the statement added.

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Despite inheriting a challenging economic situation, the government reaffirmed its commitment to restoring fiscal discipline, stabilizing the Cedi, curbing inflation, and creating employment opportunities for the youth.

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