IBHAG reconsiders boycott of Finance Ministry technical committee
The Individual Bondholders Association of Ghana (IBHAG) has apparently rescinded its earlier decision to withdraw from the technical committee of the Finance Ministry tasked with finding ways to minimize the impact of the domestic debt exchange programme (DDEP) on individual bondholders. The development comes after the group issued a strongly-worded statement over the weekend, expressing its dissatisfaction with the progress of the deliberations so far. The statement had hinted at the possibility of the group boycotting future meetings of the technical committee.
However, two representatives of IBHAG attended the latest virtual meeting of the technical committee held on Thursday morning, where they contributed to discussions on the matter. Their presence at the meeting seems to suggest that IBHAG has changed its stance and is willing to engage with the committee in finding a solution to the challenges facing individual bondholders affected by the DDEP.
The IBHAG representatives were reportedly supportive of the proposals put forth by the Individual Bondholders’ Forum (IBF) to help alleviate the burden of the DDEP on individual bondholders. Also present at the meeting were representatives from the Finance Ministry and officials from IBF.
The IBHAG and IBF are both organizations that represent individual bondholders in Ghana. While there have been suggestions for the two organizations to merge, they have maintained their separate identities due to their divergent approaches to tackling the issue of locked-up funds. Despite this, both organizations share the common goal of advocating for the interests of individual bondholders.
The DDEP was launched by the government of Ghana in 2019 as part of efforts to restructure the country’s debt portfolio. The program involves the exchange of long-term bonds held by institutional investors for shorter-term bonds that can be sold on the secondary market. However, the program has faced criticism from individual bondholders who have been unable to access their funds due to the restructuring.
The government has acknowledged the concerns of individual bondholders and has established the technical committee to find ways to mitigate the impact of the program on them. The committee comprises representatives from the Finance Ministry, the Bank of Ghana, the Securities and Exchange Commission, and other stakeholders in the financial sector.
The decision of IBHAG to withdraw from the committee had raised concerns about the ability of the committee to achieve its mandate. However, the organization’s apparent change of heart and willingness to engage with the committee is a positive development that could pave the way for a more inclusive and effective resolution of the challenges facing individual bondholders.
The ongoing deliberations around the DDEP in Ghana highlight the challenges that arise when governments undertake debt restructuring programs. While such programs can be necessary to improve the sustainability of a country’s debt profile, it is crucial that the interests of all stakeholders are taken into account, including individual bondholders. The decision of IBHAG to engage with the technical committee is a step towards achieving this goal.
