Banks held the largest holders of government bonds and notes of about ¢50.5 billion as of the end of September 2021.

According to the monthly bulletin by the Central Securities Depository, the total bonds and domestic notes issued by the government were estimated at ¢160.1 billion.

Firms & Institutions held 25.3% (¢40.5 billion), whilst Others including retail with 13.9% (¢22.25 billion), and Foreign Investors holding 10.8% (¢17.29 billion).

The Bank of Ghana also held 10% (¢16.1 billion) of the government bonds and notes, whilst pensions was 5.6% (¢8.96 billion) and Rural Banks with 1.4% (¢2.24 billion).

Additionally, Insurance Companies held 0.9% (¢1.44 billion) and SSNIT 0.4% (¢640.4 million).

Treasury Bills however represented 16.4% of total securities, whilst medium-tenor bonds (2 years to 5 years) was estimated at 49.5%.

Long-tenor bonds (6yrs and above) constituted 34.2% of total securities.

A study conducted by Banking Consultants Dr. Richmond Akwasi Atuahene and K.B. Frimpong indicated that the estimated bondholders’ net present value losses could have a negative and significant impact on the financial and the real sectors of the economy.

“Given that Ghana’s financial system held large amounts of government debt (51.6% of the domestic debt stock), the expectation is that a collapse in confidence in government of Ghana’s solvency would lead to a large‐scale deposit runs and a credit crunch”.

However, the study revealed that, if the debt exchange is fully participated by all domestic bondholders, debt service relief from the debt exchange programme together with stronger fiscal consolidation efforts will assist the government in bringing debt on a sustainable path by 2028 to 55 percent debt to GDP.

Government on December 5, 2022, announced a debt exchange programme for domestic bondholders.

Accordingly, the Ministry of Finance announced that eligible domestic bonds and notes of ¢137.3 billion will be split into four new amortizing bonds maturing in 2027 (17%), 2029 (17%), 2032 (25%) and 2037 (41%), paying equal step-up coupons of 0% in 2023, 5% in 2024 and 10% from 2025 onward to 2037.