The National Democratic Congress (NDC) Minority in Parliament has served notice it will not accept government’s proposed debt exchange programme as announced by the Minister for Finance, Mr. Ken Ofori-Atta.
Speaking at a news conference on Monday, Minority Leader Haruna Iddrisu said the policy is unacceptable and cannot be allowed to proceed.
He said his side will use every legitimate means to oppose the move.
“Let me state without any fear of contradiction that the form and structure of the debt restructuring announced by Finance Minister Ken Ofori-Atta this morning are unacceptable to us and we simply will not accept it.”
Mr. Haruna Iddrisu who is also the Member of Parliament (MP) for Tamale South also questioned why the 2023 budget was silent on this policy.
“I want to ask how come this debt restructuring was not included in the 2023 budget”, the Minority Leader added.
Minister for Finance Ken Ofori-Atta on Monday announced the government’s domestic debt exchange programme.
These measures include some exemptions and external debt restructuring parameters that will be implemented.
According to the Finance Minister, treasury bills and individual bondholders will not be affected by this exercise.
However, domestic bondholders will be compelled to exchange their instruments for new ones.
“Existing domestic bonds as of December 1, 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% in 2025 until maturity.
“Coupon payments will be semi-annual,” the Minister said.
Meanwhile, Mr. Ofori-Atta has given assurance that there will be no haircuts on the principal of bonds.
Pensions Chamber backs minority
Just like the minority caucus in parliament, the Chamber of Corporate Trustees has rejected the debt exchange programme proposed by the Ministry of Finance.
According to the chamber, the proposal put forth is inferior to market expectation and will destroy the savings of Ghanaians and further undermine market confidence.
“We have carefully analysed the announcement by the Minister of Finance on the Debt Exchange Programme and are of the opinion that it is injurious to the interest of contributors to pension schemes.
“The proposal as put forth by the Minister of Finance is inferior to market expectation and will destroy the savings of Ghanaians and further undermine market confidence. This is why we reject it outright”, the Chamber stress in a statement.
It assured contributors to pension schemes that the industry has not agreed to the debt exchange programme proposed by the Ministry of Finance.
“As Trustees, we hold a fiduciary responsibility and are enjoined to seek the best interest of contributors at all times”, it stressed.
The Chamber further stated that though it recognises that inflation has caused significant harm to pension fund assets this year and that there is an urgent need to reduce the government debt burden and restore macroeconomic stability that should however not be done to the detriment of contributors to pension schemes.
“We share in Government’s call for burden sharing, but that should be done in the spirit of fairness to ensure a win-win outcome to all stakeholders”, the chamber added.
It urged contributors to pension funds and actors in the pensions industry to remain calm “as we seek the best outcome in our negotiations with the Ministry of Finance”.
“We will duly inform members of the outcome of our deliberations”, it concluded.
