Finance Ministry to settle outstanding debts on coupons on April 28
The Finance Ministry of Ghana has announced that it will settle outstanding debts on coupons by April 28, 2023. The decision was made after an engagement with the leadership of the Coalition of Individual Bondholders Groups on the timelines of payment of outstanding domestic debt obligations.
The move comes after the Coalition of Individual Bondholders Groups, which includes the Ghana Individual Bondholders Forum (IBF) and the Individual Bond Holders Association of Ghana (IBHAG), petitioned President Akufo-Addo on April 11, 2023, regarding the non-payment of old bonds that were not part of the recent domestic debt exchange programme.
In a statement, the Coalition expressed regret that the Finance Ministry had consistently defaulted in paying the bonds after they matured. They also noted that the continuous delay or disregard for the payments was creating undue distress for fellow Ghanaians, particularly pensioners whose sustenance, health, dignity of independence, and honour of responsibility in taking care of their young wards and families are contingent on these savings.
The Finance Ministry acknowledged the concerns raised by the Coalition and thanked them and the Pensioner Bondholders Forum for their forbearance during the Domestic Debt Exchange Programme (DDEP) and subsequent administrative processes.
The Ministry stated that the Joint Technical Committee, which was constituted on January 18, 2023, would reconvene and agree on a pathway towards the settlement of the outstanding debt obligations by April 28, 2023.
The move to settle the outstanding debts on coupons is a positive development for bondholders and is likely to provide relief to many Ghanaians who have been affected by the delay in payments. However, it remains to be seen how the Finance Ministry will structure the payment schedule and how it will address the concerns raised by the Coalition regarding the non-payment of old bonds.
The Finance Ministry is facing fiscal challenges, and it is crucial that it develops a sustainable and viable payment structure that balances the needs of bondholders with the broader economic goals of the government. The Ministry will need to consider the impact of the payment schedule on the broader economy, including the potential for inflation and the impact on the country’s credit rating.
Overall, the move to settle the outstanding debts on coupons is a step in the right direction and demonstrates the government’s commitment to addressing the concerns of bondholders. It is essential that the Finance Ministry continues to engage with stakeholders and develop policies that promote sustainable economic growth and ensure that the needs of all Ghanaians are met.