Drawing from my extensive experience in risk management at major Ghanaian banks like GCB Bank, where I navigated the 2022-2024 Domestic Debt Exchange Programme (DDEP) impacts, I outline the major financial risks for the personal sector (individuals and households) in Ghana. The DDEP, initiated in December 2022 to restructure domestic debt amid fiscal challenges, led to haircuts on bonds, eroding trust. These risks are framed under BoG’s Risk Management Framework (aligned with Basel III) and post-DDEP recovery trends as of 2025, emphasizing practical mitigation like diversification and regulatory protections under Act 930.

• Credit Risk (4 Marks): The risk of default by borrowers or issuers, heightened post-DDEP as government bonds (e.g., via Treasury bills) faced extensions and rate reductions. For personal investors, this means potential losses on savings in bonds or mutual funds holding government securities. Example: During DDEP, individual bondholders saw principal reductions up to 50%, as per BoG Notice BG/GOV/SEC/2023/05 on recapitalization. Mitigation: Shift to insured deposits under Ghana Deposit Protection Act, 2016 (Act 931), limiting exposure.
• Market Risk (4 Marks): Fluctuations in asset prices due to interest rate changes, inflation, or currency volatility. Ghana’s high inflation (peaking at 54% in 2022) and cedi depreciation (over 50% vs. USD in 2022-2023) amplify this. Personal sector faces losses in stock investments on GSE or forex holdings. Example: Post-DDEP, bond yields spiked to 30-40%, but market sell-offs caused price drops, affecting pension funds like Tier 2 under NPRA guidelines. Practical insight: Use BoG’s Liquidity Risk Management Guidelines to favor short-term T-bills over long bonds.
• Liquidity Risk (4 Marks): Inability to convert assets to cash without loss, exacerbated by DDEP’s bond illiquidity (exchanges locked maturities). Individuals may struggle to access funds for emergencies, as seen in frozen accounts during the 2017-2019 banking cleanup (e.g., UT Bank’s collapse). Example: In 2023, retail investors couldn’t sell restructured bonds easily, per SEC directives. Mitigation: Maintain cash buffers and use digital platforms like mobile money (regulated under Act 987) for quick access.
• Inflation Risk (4 Marks): Erosion of purchasing power, with Ghana’s inflation averaging 20-30% post-DDEP due to fiscal deficits. Personal savings in low-yield accounts lose real value. Example: Real returns on savings turned negative, impacting retirees relying on fixed-income, as per BoG’s monetary policy reports. Insight: Invest in inflation-linked assets like GSE-listed equities (e.g., cocoa firms benefiting from global prices) or real estate, compliant with sustainable banking principles.
• Operational Risk (4 Marks): Losses from failed processes, systems, or external events, including cyber threats in digital banking. Post-DDEP, increased fintech adoption (e.g., MTN MoMo) raises fraud risks under BoG’s Cyber Security Directive 2020. Example: Phishing scams surged in 2023-2024, affecting personal accounts. Mitigation: Adhere to two-factor authentication and BoG’s outsourcing regulations for secure apps.

These risks interconnect, as DDEP’s fiscal strain fueled inflation and market volatility, but 2025 trends show recovery via IMF support. Personal sector should consult licensed advisors under SEC for diversified portfolios, ensuring ethical, compliant investing for long-term resilience.