Minority to government: Suspend debt exchange programme now

The Minority in Parliament has called for the immediate suspension of the government domestic debt exchange programme.

Finance Minister Ken Ofori-Atta on Monday (5 December) launched the debt exchange programme in line with the government’s quest to restructure debt and put the economy back on track.

Addressing journalists on Monday (16 January), Minority Leader Haruna Iddrisu argued that the debt exchange programme could derail gains made in the financial sector.

“The last thing Ghanaians want is the total collapse of the financial sector by government which embarks on a borrowing spree,” the MP for Tamale South said. “The future sustainability of our insurance companies cannot be guaranteed under this programme”.

“It is on this call, that we in the NDC, the Minority group call on President Nana Addo Dankwa Akufo-Addo to immediately suspend the ongoing debt exchange. It has already failed and promises to be a failure.”

“He should suspend the initiative and engage in deeper consultation and allow for greater transparency in the negotiation, adoption of the outcome in order to save Ghana’s economy,” Iddrisu added.

DDEP modifications

On Saturday 21 December 2022, the government modified its GHC137.3 billion domestic bond exchange programme to include individuals. The debt exchange programme is among efforts the government is making to restructure the national debt.

The government took the decision to restructure domestic debt step to secure approval from the management and executive board of the International Monetary Fund (IMF) for a US$3 billion loan-support programme to address Ghana’s economic crisis.

A press release issued by the Ministry of Finance said that, in addition to extensions previously set out, the government was “expanding the type of investors that can participate in the exchange to now include individual investors”.

Other modifications to the debt exchange programme include the setting of a non-binding target minimum level of overall participation of 80% of aggregate principal amount outstanding of eligible bonds.

The ministry also said it is “offering accrued and unpaid interest on eligible bonds, and a cash tender fee payment to holders of eligible bonds maturing in 2023”.

There would also be eight new instruments to the composition of the new bonds, making a total of 12 new bonds, one maturing each year starting January 2027 and ending January 2038.

The ministry said the modifications would be set out in full detail in an Amended and restated exchange memorandum, expected to be published in the week of 26 December 2022.

“Conforming changes (including adding and modifying defined terms) in respect of the above amendments and modifications to cure ambiguity, omission, defect, error or inconsistency may be included in the Amended and Restated Exchange Memorandum.” the ministry said.

The government has further extended the deadline for voluntary participation in the debt exchange programme to 30 January 2023 from 16 January.

Fred Dzakpata

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