Deputy Finance Minister, Dr John Kumah
Deputy Finance Minister, Dr John Kumah, has advised
bondholders to comply with the government’s debt exchange programme.
Speaking in an interview on JoyNews’ PM
Express on Monday, Dr Kumah stated that institutional bondholders who
reject the programme will have themselves to blame.
“..then you don’t get the carrots, the benefits,
the buffers that have been provided then you are on your own. It means that you
are open to default in terms of if the market is unable to redeem,” he
told JoyNews’ Evans Mensah.
According to him, interested bondholders have a
10-day period starting from Monday, December 5, 2022, to sign on to the programme.
Government on December 5, 2022, announced a debt
restructuring measure.
According to Finance Minister, Ken Ofori-Atta, the
objective is “to invite holders of domestic debt to voluntarily exchange
approximately ¢137 billion of the domestic notes and bonds of the Republic,
including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by
the Republic.”
Bondholders like pension funds, banks and insurance
firms will have to exchange their bonds for one that will earn zero interest
next year.
The new bonds will only begin to earn five per cent
interest in 2024 and 10 per cent for the remainder of their tenure. The
maturity dates have also been extended with the first bonds only maturing in
2027.
However, some of the institutions such as the
Trades Union Congress, Ghana Medical Association, the Chamber of Corporate
Trustees of Ghana among others have already rejected the offer.
Dr Kumah said the debt restructuring programme is
the way to salvage the economy.
He added that government will continue to engage
the stakeholders “for them to be rest assured that we stand to gain better
together than to fight over this matter.”
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