MoF: Discussions On Terms Of Principal Payments And Interest Ongoing

The Ministry of Finance has rubbished claims that the government will undertake 30 per cent “haircut” on international bonds and delay payment for domestic bondholders.

The Ministry in a statement indicated that it is still discussing the terms of payment with the International Monetary Fund (IMF).

In an interview with JoyNews, Deputy Minister for Finance, John Kuma reportedly said the government was adopting a debt restructuring measure that will bring about a 30 per cent haircut on foreign bonds with delayed payment to local bonds holders.

“The foreign will take haircut, that is where the haircut comes in. There, we are negotiating to go into their principal, plus suspension of their interest at NPV (net present value) level. We are negotiating on principal of up to 30%,” Kumah said according to Reuters.

This contradicted assurances from President Akufo-Addo that investors won’t lose a dime of their investment in October while he was addressing the country on the Economy.

“I also want to assure all Ghanaians that no individual or institutional investor, including pension funds, in Government treasury bills or instruments will lose their money, as a result of our ongoing IMF negotiations. There will be no “haircuts”, so I urge all of you to ignore the false rumours, just as, in the banking sector clean-up, Government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits,” President Akufo-Addo said.

A statement from the Ministry of Finance, however, said the progress of technical work on possible debt operations as part of negotiations with the International Monetary Fund is still ongoing.

“Details of the different layers of a debt operation, including the terms of principal payments and interest on the public debt, are still being discussed, taking into account principles of debt sustainability and international best practices.”

The Ministry noted that the government is contemplating on a debt operation that will alleviate the pressures on the national budget and restore debt sustainability.

It added, “This would also open up financing streams and provide a needed balance of payment support from the Fund.

It noted that the Government of Ghana is committed to rolling out a lasting solution to the current economic challenges, with the ultimate goal of restoring macroeconomic stability and anchoring debt sustainability.

Source: opemsuo.com/Hajara Fuseini