The Finance Minister, Ken Ofori-Atta, has indicated that the initial stance of zero coupon in 2023 for individual bond holders “has to change.”
“We are looking at a [a] situation where, may be, the zero coupons for bond holders in 2023 should be changed going forward,” the Minister said in an interview with George Wiafe of JoyNews.
The government, as part of its debt restructuring, had announced that it would not pay interest on individual bonds this year, a decision which has been fiercely opposed.
However, the Finance Minister has also ruled out any move to abolish the Debt Exchange Programme or grant total exemption to individual bond holders. This has been the demand from a section of the public, including the Minority in Parliament.
Though the Minister’s statement was not sacrosanct, if implemented would have met one of the demands of the agitated individual bondholders.
The individual bond holders have argued, as reported widely, that the government’s Debt Exchange Programme was one of the harshest debt restructuring measures ever adopted.
Yesterday, The Chronicle Online reported that Ken Ofori-Atta had invited members of the Ghana Individual Bond Holders’ Forum to a meeting over their petition.
The meeting was on the back of claims by the members that they were not consulted prior to the announcement of the policy.
At the time of filing this report yesterday, information that was available to this paper from the meeting was that the two sides have agreed to set up technical committee to review the terms.
DEAL WITH CONCERNS
In the interview with George Wiafe, host of PM Express Business Edition on JoyNews, Mr. Ofori-Atta promised that the Finance Ministry would deal with some of the concerns of individual bond holders and pensioners.
However, he maintained that the country was in a situation where its debt exchange was necessary.
He added that “We have a situation where we have come out of certain formulations and we have gone ahead to discuss with the financial institutions that way to mitigate that. I think we’ve done that successfully.”
“In the same way we sat with the Union pensions, and I think we are making great progress in what we do for them; in the same way in which we are looking at individual bond holders to see how we can tweak this. Would we lose a bit of what we have? I think all of us are going to, but we have to make sure that what we eventually come up with will create sustainability,” he explained.
Mr. Ofori-Atta noted that the government was fully committed to reviewing the programme to deal with some of the concerns of bond holders, arguing that there should be the need for some burden sharing under the programme.
“This is because this Debt Exchange Programme is needed now to help stabilise the economy and help the country secure an IMF Programme before the end of the first quarter of 2023.”
DEBT CANCELLATION
In a related development, Aid and campaign groups have called for international creditors to cancel a large portion of Ghana’s debts, as it struggles to contend with the economic crisis.
“The people of Ghana have suffered extensively from the crisis,” the groups, which all have operations in Ghana, said in an open letter on Wednesday. Wealthy private lenders must share in the costs of a crisis they helped to create and cancel the debt,” they said in a letter.
Signatories of the letter, which included Oxfam, Christian Aid, Caritas Ghana, Debt Justice and Action Aid, said the key challenge was to get private lenders to agree to a significant debt cancellation.
The government was asked to restructure its bilateral debt under the G20 common framework platform – launched in 2020 to help coordinate debt reprofiling and restructuring – this month, after announcing it would default on most of its external debts at the end of last year.
Ghana’s consumer inflation rate rose to a record 54 percent year-on-year in December, driven by rising fuel, utilities and food costs. International reserves have dwindled to less than two months of import cover.
