Minority Against Gov’t Domestic Debt Exchange
The Minority in Parliament has announced its disagreement with Finance Minister Ken Ofori Atta’s announced domestic debt exchange programme.
The Minority holds that the announced debt exchange programme of the government is “breaking contracts” and would serve as a disincentive for investors.
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.
On Sunday, Ken Ofori Atta announced a domestic debt exchange programme that will transition the country to debt sustainable levels. 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.”
He also assured that treasury bill holders will be paid the full value of their investment on maturity while there will be no “haircut” on the principal of domestic bondholders.
He further assured that individual holders of bonds will not be affected by the domestic debt exchange programme.
But the Minority says the programme is unacceptable.
“Let me state without any fear of contradiction that the form and structure of the debt restructuring plan announced by Minister Ken Ofori Atta are unacceptable to us and we simply will not accept it.”
“How come the contours…of this debt exchange programme was not announced in the budget statement that was presented to Parliament. We’re investors consulted? Were bondholders consulted? How did he come to this conclusion? Are we not right to state that this amounts to economic imposition?” he quizzed.
Minority Leader Haruna Iddrisu stated, “We as the Minority are cautioning that government is simply breaking contracts according to the plans revealed by the Finance Minister this morning. This development will deter investors without first informing and consulting them about what your plans were.
“The best way to manage a crisis in our view is to anticipate it or reduce its impact or at best prevent it from happening. They simply failed in preventing this from happening”, he said at a presser.
Source: opemsuo.com/Hajara Fuseini
