The Minority in Parliament has demanded that the government’s domestic debt exchange program be suspended immediately.
Finance Minister Ken Ofori-Atta launched the debt exchange program on Monday (5 December), as part of the government’s effort to restructure debt and get the economy back on track.
Minority Leader Haruna Iddrisu told journalists on Monday (16 January) that the debt exchange program could jeopardize financial sector gains.
“The last thing Ghanaians want is the total collapse of the financial sector by the 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, and adoption of the outcome in order to save Ghana’s economy,” Iddrisu added.
The government expanded its GHC137.3 billion domestic bond exchange program to include individuals on Saturday, December 21, 2022. The debt exchange program is one of the efforts being made by the government to restructure the national debt.
The government made the decision to restructure domestic debt in order to gain approval from the International Monetary Fund’s (IMF) management and executive board for a US$3 billion loan-support program to address Ghana’s economic crisis.
According to a press release issued by the Ministry of Finance, the government is “expanding the type of investors that can participate in the exchange to now include individual investors” in addition to the previously stated extensions.
Other changes to the debt exchange program include the establishment of a non-binding target minimum level of overall participation of 80% of eligible bonds’ aggregate principal amount outstanding
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 added to the new bond’s composition, for a total of 12 new bonds, one maturing each year beginning in January 2027 and ending in January 2038.
The ministry stated that the changes would be detailed in an Amended and Restated Exchange Memorandum, which is expected to be published in the week of December 26, 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 extended the deadline for voluntary participation in the debt exchange program from January 16 to January 30, 2023.
