Minority rejects Government’s Domestic Debt Exchange Programme
The Minority Caucus in Parliament has rejected government’s proposed Domestic Debt Exchange Programme [DDEP].
The Minority Caucus during a press briefing on Monday, December 5, 2022, described the policy as unacceptable asserting that it will use every legitimate means to oppose the programme.
“Let me state without any fear of contradiction that the form and structure of the debt restructuring announced by Finance Minister Ken Ofori-Atta this morning are unacceptable to us and we simply will not accept it,” said the Minority Leader, Haruna Iddrisu.
Further questioning why the DDEP was not included in the 2023 budget statement.
“I want to ask how come this debt restructuring was not included in the 2023 budget,” he quizzed.
Finance Chief, Ken Ofori-Atta on Sunday, December 4, announced the government’s domestic debt exchange programme.
These measures include some exemptions and external debt restructuring parameters that will be implemented.
According to him, treasury bills and individual bondholders will not be affected by this exercise.
However, domestic bondholders will be compelled to exchange their instruments for new ones.
“Existing domestic bonds as of December 1, 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.
“The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% in 2025 until maturity.
“Coupon payments will be semi-annual,” he said.
Meanwhile, the Finance Minister Ken Ofori Atta, has revealed that the Domestic Debt Exchange Programme (DDEP) by government is a necessary requirement for a deal with the IMF.
According to him, the government has no choice but to undertake the debt restructuring programme to put the country’s debt level on a sustainable path.
An IMF mission team is presently in the country to continue discussions with the authorities on the country’s post-COVID programme for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement.
