The Minister for Finance, Ken Ofori-Atta, has assured pensioners that the government will honour their coupon payments and maturing principals, like all government bonds, in line with her Fiscal commitments.
This means all those who self-exempted from the voluntary Domestic Debt Exchange Programme (DDEP) will be paid all coupon payments and maturing principals when due.
This, according to him, is to ensure their well-being and dignity as Senior Citizens.
Persons of 59 years old or older issued 1,340 instructions and tendered an amount of GH₵423,012,028 which represents 0.43% of the eligible bonds.
There were, however, fears that those who opt against signing up are not guaranteed market liquidity for the old bonds, because they are likely to become less tradable on the secondary market, compared with the new bonds.
On the other hand, individuals who signed up for the new bonds will have more certainty even in a changing economic landscape.
Briefing Members of Parliament about the whole Debt Exchange Programme yesterday, the Finance Minister said the exercise has been an intense one of balancing compassion, with the unavoidable and difficult path to restoring debt sustainability.
As a result, a number of amendments to the terms of the offer have taken place, with the final extension deadline of 7th February 2023 and an administrative extension to 14th February 2023.
The minister explained that the various extensions were to allow Government to incorporate the feedback and insights it received from the various stakeholders including the Council of State, the Pension Funds, Organised Labour, the Ghana Association of Bankers and the Individual Bond Holders.
Ghana seeking $3 billion loan
He further told the MPs that Ghana and the International Monetary Fund (IMF) have already reached staff-level agreement on economic policies and reforms to be supported by a new three-year arrangement under the Extended Credit Facility (ECF) of about $3 billion.
But, the IMF has made it clear that the Board approval of the deal is contingent on a successful debt exchange programme.
Ofori-Atta said as of December 2022, the total outstanding debt (Eligible and non-Eligible Holders) amounted to approximately GH₵137 billion.
Reduced to GH₵130bn as a result of maturities
According to him, subsequent extensions of dates and payment of maturities meant that the remaining stock reduced from GH₵137 billion to GH₵130 billion.
However, he said the Eligible Bonds, as per the Exchange Memorandum, meant an exclusion of Pension Funds and Bonds that were subject to swap mechanisms for monetary and exchange rate policy operations.
The Finance Minister noted that, this then brought the eligible bonds for tendering to GH₵97.7 billion (GH₵97,749,624,691).
He explained that out of the total GH₵97.7 billion (GH₵97,749,624,691) eligible bonds for tendering – GH₵82.9 billon (GH₵82,994,510,128) was successfully tendered.
This accounted for about 85% of outstanding eligible amounts and exceeding the target of 80% as expressed in the Memorandum of Exchange.
Ofori-Atta said government is, however, mindful that the GH₵82,994,510,128 bonds that were successfully tendered represents 64% of the outstanding debt stock of GH₵130 billion at the end of December, 2022.
He announced that Collective Investment Schemes and Natural Persons below the age of 59 issued 4,109 instructions and tendered an amount of GH₵5.9 billion (GH₵5,926,307,555) representing 6.06% of the eligible bonds.
Also, he said natural persons 59 years old or older issued 1,340 instructions and tendered an amount of GH₵423 million (GH₵423,012,028) which represents 0.43% of the eligible bonds
Aside the above, he stated that all other holders issued 4,489 instructions and tendered an amount of GH₵76.6bn (GH₵76,645,190,545) representing 78.41% of the eligible bonds.
Government had already announced a suspension of all debt service payments for certain categories of external debt, pending an orderly restructuring.
Ofori-Atta revealed that Ghana initiated discussions with representatives of international bondholders and their Advisors.
According to him, substantive discussions are due to start with them in the weeks to come.
Ghana officially asked its bilateral creditors for a Debt Treatment initiative under the G-20 Common framework.The Finance minister said the process of negotiating have started in good faith with commercial creditors.
According to him, the members have indicated their commitment to establish a Creditor Committee to assess Ghana’s request for debt treatment under the Common Framework by end February, 2023.
