We don’t trust govt’s assurances on debt exchange programme

The Ghana Mine Workers Union has cast doubts on the government’s assurance that its pension funds won’t be affected by the debt exchange programme.

Government on Monday, December 5, 2022, launched a domestic debt exchange programme aimed at bringing Ghana’s debt level to an appreciable level.

Abdul Moomin Gbana is the General Secretary of the union, and he says the government must ensure that their pension funds are not affected.

“Too many times, most of these interventions have been put in place, but it doesn’t pan out the way we expect it. So our point remains that, government should just be cautious that, in restructuring its debts to become sustainable, the restructuring does not impact on pension funds,” the General Secretary of the Ghana Mine Workers said.

As a critical part of the ongoing negotiations with the International Monetary Fund to secure Ghana $3 billion in support for the economy, the government is exchanging already sold bonds for new ones with a more flexible interest payment plan.

In a public address on December 4, on the current economic situation, the Finance Minister, Ken Ofori-Atta said the government will ensure that people’s investments are safe.

“Under the domestic bonds exchange 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 these bonds will be set at zero percent in 2023, 5 percent in 2024 and 10 percent from 2025 until maturity… In line with this, treasury bills are completely exempted, and all holders will be paid the full value of their investments on maturity. There will be no haircuts on the principal of bonds, and individual holders of bonds will also not be affected.”