Senyo Hosi describes second debt exchange programme as a “good deal”
The Ghanaian government’s second round of debt exchange programme has received a positive review from the Convenor of the Individual Bondholders Forum, Senyo Hosi. Hosi has described the policy document as a “good deal” for pension funds and stated that the terms of the policy are more favourable than the earlier debt restructuring exercise. The programme, which aims to reduce the country’s debt burden, has been met with criticism from labour unions who claim that the government has once again failed to prioritize stakeholder consultations.
Speaking in an interview, Hosi noted that the policy’s terms must be critically analysed by pension funds, as their liabilities are long term and not short term. He also highlighted that, while there may be some inherent political risk, the deal is technically and financially sound.
Hosi’s support for the debt exchange programme comes despite the opposition from labour unions. He noted that, with proper consultation and communication, progress with the unions and trustees could be made. However, Hosi emphasised that the government must take steps to manage the consultation and communication process effectively.
The Convenor of the Individual Bondholders Forum also highlighted the potential benefits of the policy for pension funds. He stated that the deal could result in a yield of about 21, which is higher than the current yield of around 18 or 19.02 yields on the current papers. This could potentially boost pension returns for union members, providing a compelling reason for trustees to take the deal.
The Ghanaian government’s debt exchange programme is part of efforts to address the country’s debt burden. The first round of the programme, which was completed in 2021, resulted in the exchange of USD 1.9bn of bonds for longer-dated ones. The second round of the programme seeks to build on the success of the first round, with the government hoping to reduce its debt burden further.
The positive review of the Ghanaian government’s second round of debt exchange programme by Senyo Hosi, Convenor of the Individual Bondholders Forum, comes as a boost to the government’s efforts to reduce the country’s debt burden. While the programme has been met with opposition from labour unions, Hosi’s analysis suggests that the terms of the policy are favourable for pension funds. If the government can manage the consultation and communication process effectively, progress with the unions and trustees could be made. Ultimately, the success of the programme will depend on how well it is implemented, and the government will need to ensure that all stakeholders are consulted and their concerns addressed.
