CSOs to proffer alternative solutions to Gov’t’s Debt Exchange Programme in major forum
Some Civil Society Organisations (CSOs) in the country have revealed plans to hold a major forum come Thursday, December 15, to discuss government’s Domestic Debt Exchange Programme (DDEP).
The Forum, announced by conveners of the CSO Budget Forum, will focus on proffering alternative solutions to the DDEP.
“Come next week, CSOs will collectively make a statement on government’s debt restructuring programme in the form of the Domestic Debt Exchange Programme. At the Forum, will share our opinions on the DDEP and what we think government could have done to avoid it,” said Fiscal Policy Analyst, Dr Alex Ampaabeng.
“The Forum will also look at providing solutions to Government on what to do to fix the current economic mess,” added Abdulkarim Mohammed of ACT Ghana.
The Domestic Debt Exchange Programme (DDEP) as announced by government, is a necessary requirement for a deal with the IMF.
According to the country’s Finance Chief, Ken Ofori-Atta, the government has no choice but to undertake the debt restructuring programme to put the country’s debt level on a sustainable path.
In a press briefing on Monday, December 5, Finance Chief Ofori-Atta noted that no individual bondholder will lose their funds in the proposed programme, further assuring financial sector players of government’s support to minimise the impact of the programme on their activities.
A total amount of GHS 137bn in invested funds by local investors is to be affected by the announced Domestic Debt Exchange Programme (DDEP) by government.
GHS denominated Notes and Bonds issued by the Republic of Ghana accounts for the largest portion of the domestic debt being GHS 126bn in total value.
GHS denominated bonds issued by E.S.L.A. Plc and Daakye Trust Plc account for GHS 8.3bn and GHS 2.7bn respectively of the total domestic bond value.
The DDEP the country’s Finance Chief Ken Ofori-Atta noted, will require domestic bondholders to exchange their existing debt instruments for new ones.
According to the Finance Minister, existing bonds as of December 1, 2022 will be exchanged for a set of four (4) new bonds maturing 2027, 2029, 2032 and 2037.
The annual coupon on the new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
