T-bills unlikely to be included in DDEP in near term – Fitch

Source The Ghana Report

Ratings agency, Fitch, says it does not expect Treasury bills to be included in the Domestic Debt Exchange Programme in the near term.

According to the UK-based firm, despite the high yield on the short-term securities, it is the only financing tool left for the government and therefore it will be suicidal to include it in the domestic debt restructuring.

A Senior Director of emerging Market and African Sovereign Ratings at Fitch Ratings, Toby Illes, speaking at the Africa Webinar Series titled “Reform and New Challenges in Western Africa” said the government will not restructure T-bills.

“We don’t expect T-bills to be restructured. Just given the need for that financing tool, we wouldn’t expect that to be included”.

“In Ghana’s case, it is generally very complicated to include that in domestic debt restructuring.  I guess the main question is that domestic debt restructuring we would have now is about that the domestic debt restructuring is more about medium term when actually you move a lot of these maturities down the line”, he said

He however expressed worry about the huge domestic debt servicing expected in the years 2027 and 2028 respectively.

“The policy adjustment from now till then is a downward trend. However, as I said when we get to 2027-2028 we would have a huge hung of domestic debt service.”

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