Domestic Debt Exchange Offer Deadline Extended
The government of Ghana has announced an extension of its historic domestic debt exchange programme offer to the bondholders.
The offer of the government was set to expire on Monday, December 19, however, it has been extended to December 30 with a contemplated settlement date of Friday, January 6, 2023.
It is reported that no financial institutions took up the offer, however, the Finance Ministry says its decision to extend the deadline was to help the financial sector secure internal and Executive Board approvals to take up the Exchange offer.
It also noted that the extension also affords the government the opportunity to consider suggestions made by all Stakeholders with the aim of adjusting certain measures acceptable within the constraints of the Debt Sustainability Analysis.
“Considering these developments, and taking cognizance of the festive season, we have decided to extend the Expiration Date of the voluntary offer to Friday, December 30th, 2022, with a contemplated settlement date on Friday, January 6th, 2023.”
“We believe this extension will provide enough time for the necessary consultations and analysis to be completed to meet the expectations of local and foreign institutional bondholders while preserving the integrity of the Debt Sustainability Analysis and the Staff Level Agreement.”
The country’s debt as of the end of September 2022 stood at GH¢467,371.31 million (US$48,871.34 million) according to provisional results. A debt sustainability analysis by the Finance Ministry showed that Ghana’s debt is unsustainable.
On December 5, Finance Minster Ken Ofori Atta announced a domestic debt exchange programme that will transition the country to debt sustainable levels.
Launching the programme on December 6, he noted that 137 billion of the country’s domestic debt needs to be restructured to get the country’s debt at a sustainable level.
He explained that “under the Programme, domestic bondholders will be asked to exchange their instruments for new ones. Existing domestic bonds as of 1st December 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037. The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity. Coupon payments will be semi-annual.”
But the programme has been opposed particularly by labour unions who are calling for pension funds to be exempted.
Source: opemsuo.com/Hajara Fuseini