"Insurers not exempted from debt exchange programme \u2013 Finance Ministry"

" Insurers not exempted from debt exchange programme \u2013 Finance Ministry \r\n\r\nMinister for Finance, Ken Ofori-Atta, has averred exemption of insurance firms from the debt exchange programme is not an option.\r\n\r\nIn a statement signed by the Finance Minister to the Ghana Insurance Association (GIA), the Minister explained that based on feedback from industry players, government has made some significant adjustments that makes it extremely difficult to exempt insurers from the debt programme.\r\n\r\n \u201cBased on your letter and the feedback from you and other industry associations, the Government, working with its advisors, has made significant enhancements to the terms of the exchange instruments to address key concerns raised about accrued interest and zero coupons for 2023. The government has also improved the commercial terms of the exchange instruments; which details were announced on 24th December 2022. \r\n\r\n \u201cIn this regard, Government encourages a positive response from the industry to enable us to complete the exercise in the interest of the broader economy. In our meeting\u2026you made it very clear, the peculiar nature of your industry and therefore the forbearance required; an exemption, however, is not an option,\u201d parts of the statement read.\r\n\r\nThe Association in December last year wrote to the Ministry demanding an exemption from the Programme.\r\n\r\nAccording to its president, Seth Kobla Aklasi, 40 percent of its total assets for the Quarter 3 of 2022 were invested in Government of Ghana Securities hence any attempt to give its members a \u201chaircut\u201d will result in liquidity challenges for insurance firms as most of them will not be able to make claims payments to policy holders.\r\n\r\nGovernment after securing a $3 billion staff-level agreement with the International Monetary Fund (IMF) is struggling to restructure its debt, a requirement for approval of the IMF programme.\r\n\r\nWith much effort to stabilise its debt, the government announced a Debt Exchange Programme in December which it said would affect local bonds, individual investors and international bondholders.\r\n\r\nGovernment said local bonds were to be exchanged for new ones maturing in 2027, 2029, 2032 and 2037, with annual coupons set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.\r\n\r\nHowever, government had to postpone the deadline on three occasions after groups involved in the programme opposed the debt sustainability with fears of a \u2018haircut\u2019 on investment."

"Insurers not exempted from debt exchange programme \u2013 Finance Ministry"

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