Leading business executive, Sir Sam Jonah, has warned that Ghana’s insurance industry continues to face risks stemming from the lingering effects of the Domestic Debt Exchange Programme (DDEP), particularly its heavy reliance on government securities.
Speaking at the 11th Annual Conference of the Insurance Brokers Association of Ghana, he said the sector is showing signs of recovery, but the structural weaknesses revealed by the programme—especially the concentration of investment portfolios in sovereign instruments—remain unaddressed.
“The first is the residual damage of the domestic debt program. The DDEP was a blow to the capital base of many firms, insurers and intermediaries alike,” he said.
Rolled out in December 2022 as part of Ghana’s debt restructuring programme, the DDEP compelled domestic bondholders, including insurers, to exchange existing government securities for new instruments under revised terms, significantly affecting asset values and capital buffers.
Sir Sam Jonah called for a more direct approach to addressing the sector’s challenges.
“I won’t be soft on this because they require honest naming, because problems that are named can be solved. Problems that are spoken about in whispers and euphemisms only grow,” he said.
While acknowledging signs of improvement, he cautioned against complacency.
“Recovery has been underway, and the numbers are encouraging, but we must not mistake recovery for full restoration,” he added.
He also highlighted the structural risk exposed by the programme.
“DDEP exposed a structural vulnerability that our industry’s investment portfolios are too heavily concentrated in government securities,” Sir Sam Jonah said.
He urged industry players to take decisive action.
“Diversification of investment strategy and the building of more robust capital buffers must be standing agenda items for every board in this industry,” he added.
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