The Government has for the fifth time extended the deadline for signing up to the Domestic Debt Exchange Programme (DDEP) to Friday, February 10, 2023.
The extension from the February 7 deadline was to create a window for bondholders who experienced technical glitches to complete the online processes for tendering their bonds.
Prior to that, government had moved the deadline for signing up to the programme from December 30 of last year to January 16, then January 31 of this year.
“The timetable of the Exchange is not otherwise affected by this, except for the announcement date which is now expected to occur on Monday, February 13, 2023.
“The settlement of the Exchange is still scheduled for Tuesday, February 14 2023. Except as set forth in this paragraph, the terms and conditions of the Exchange are not modified or amended,” the Ministry of Finance announced in a press statement.
The initiation of a DDEP is informed by a Debt Sustainability Analysis.
The analysis reveals that Ghana’s public debt has become unsustainable; and that debt servicing accounted for more than half of total government revenues and almost 70 per cent of tax revenues.
The Government has assured the International Monetary Fund (IMF) of debt sustainability in order to gain creditors’ confidence in the Fund’s $3 billion loan-support programme.
This is after reaching a Staff Level Agreement with the IMF for a $3bn three-year arrangement under the Extended Credit Facility (ECF), and hopeful of an Executive and Board Management approval by the close of March 2023.
The Ministry of Finance in December 2022, therefore, announced the DDEP within the context to review interest rates and maturities of the existing bonds to enable Ghana reach the required debt sustainability threshold of debt-to-GDP of 55 percent.
This will require domestic bondholders to trade about 80 per cent of their bonds valued at GHS137 billion for new ones.
Since then, the Ministry of Finance has successfully reached new terms of agreement on the programme with the Ghana Association of Banks (GAB), Ghana Insurers Association (GIA), and the Ghana Securities Industry Association (GSIA).
It is, however, yet to have the support of individual bondholders and pensioners despite granting exemption to pension funds.
In this direction, all individual bondholders below 59 years, were offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 10 per cent coupon rate.
Also, all retirees (including those retiring in 2023) were offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 15 per cent coupon rate.
In an interview with the Ghana News Agency, Mr Senyo Hosi, Convenor of the Individual Bondholders Forum, said they had held a town hall meeting and given people information and education to be able to make their own decisions to participate in the DDEP.
He advised the Government to reconsider strong fiscal adjustment interventions, “otherwise, we would sacrifice and this sacrifice can end up becoming useless.”
Mr Hosi added: “We need to move on as a country. Let’s put this (DDEP) behind us so that we can shape the future together.”
Dr Adu Anane Antwi, Convener for Pension Bondholders Forum, however, said the announcement of deadline for signing up to the DDEP would not deter them from picketing the premises of the Ministry of Finance.
“We don’t care about any deadline. All we want is for us to be exempted from the programme, ” he said.
Source: Modern Ghana