We can’t accept debt exchange programme – Securities Industry Association

The Ghana Securities Industry Association (GSIA) is the latest group to kick against government’s newly announced debt exchange programme.

GSIA in a statement said, although it understands the difficulties the country is facing, it cannot accept the programme in its current form because it believes a bond is a contractual agreement between a borrower and a lender (bondholders) and therefore any changes to the terms must be agreed by both parties.

“We, at the GSIA understand the difficult crossroads at which our nation currently finds itself and the difficult choices that need to be made to set us on the path to debt sustainability. However, we are unable to accept the bond exchange program announced by the Minister of Finance in its present form,” GSIA added in the statement issued on Wednesday, December 7, 2022.

“It is our intention to engage the MoF [Ministry of Finance] on our concerns and reservations. We, therefore, urge the investing public to continue to have confidence in us as we pursue this process. In this vein, we entreat clients of our member firms to allow us to engage and then communicate the outcomes to enable them take the best decision on their investments.”
Finance Minister, Ken Ofori-Atta announcing the debt exchange programme

Eight groups have already publicly voiced out their rejection of the debt exchange programme.

Ghana’s Domestic Debt Exchange Programme was launched on Monday to put the country’s debt on a sustainable path.

The debt restructuring will see a slash in interest payments for domestic bondholders to zero percent in 2023 and five percent in 2024.

Existing domestic bonds as of December 1, 2022, will also be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037 – all in a bid of restoring the nation’s capacity to service its debt.

Under the programme, however, treasury bills and individual bondholders will not be affected while there will be no ‘haircuts’ on the principal of bonds, the government said.

Eligible domestic bondholders who fail to participate in the government debt exchange programme may get their bonds transformed into liquid assets at a low cost.