Finance Minister gives timeline for payment of defaulted bonds
Finance Minister Ken Ofori-Atta, has given a timeline for the payment of outstanding bonds that matured on February 6, after the government defaulted.
The move comes as a relief for individual bondholders who have been piling pressure on the Finance Ministry to pay the over GH¢4 billion in interest and principal on which the Ministry defaulted.
According to Mr. Ofori-Atta, all outstanding coupons will be paid after February 21, and urged bondholders to remain calm. He reiterated that the government is working to ensure that every bondholder is paid their dividends upon maturity of their bonds.
The Finance Minister explained that the delay in payment was due to the processing of coupon payments and the settlement period for the debt exchange program.
The Individual Bondholders Association of Ghana, which has been pushing for the payment of the outstanding bonds, had earlier dispatched a letter to the Finance Minister, demanding the payment of the bonds.
The group also planned a 5-day protest from February 20 to 24, to press for the payment of the bonds. The protesters will be picketing at Black Star Square, and a group of about 30 or 50 individual bondholders will be escorted to the Finance Ministry to present a petition and back to the square.
The move by the Finance Minister to give a timeline for the payment of the outstanding bonds is a welcome development, and it shows that the government is committed to meeting its financial obligations to bondholders.
The payment of the outstanding bonds is critical, as it will restore confidence in the country’s financial system and reassure investors that the government is committed to meeting its financial obligations.
However, the decision by the Individual Bondholders Forum to stage a 5-day protest is a cause for concern. The protest has the potential to disrupt economic activity and send the wrong signals to investors.
It is further a cause of concern for the government, as the Debt Exchange Programme is critical to the government’s efforts to manage the country’s debt. The programme will help to reduce the country’s debt burden, free up fiscal space, and create room for the government to meet its financial obligations to bondholders.
