Expedite debt exchange negotiations or Ghana heads for doomsday – Joe Jackson

The Director of Business Operations at Dalex Finance, Joe Jackson, has urged the government to expedite negotiations on the debt exchange programme by the end of January 2023 or the country will be heading for “doomsday”.

Speaking on the Citi Breakfast Show on Wednesday, January 4, Mr Jackson said the government must change its approach and properly engage bondholders to accept the programme.

“In my mind, by the end of this month, it should have been tied up, it is hard to imagine going into February without this issue being resolved then we will be heading into the doomsday scenario,” Mr Jackson told sit-in host Nathan Quao.

Mr Jackson added that the International market is still being kind to the country due to the recent stability of the economy following the staff-level agreement with the International Monetary Fund.

“The reason why the markets haven’t punished Ghana as badly as they could have punished us is that there is a sense that the IMF will come in and provide some stability…but we then need to negotiate with all these constituencies that we are asking to take a haircut, and it has to be voluntary. So we are walking on a knife edge, and we have to come to a conclusion very soon. I don’t think that there is a lot of time at all.”

Ghana in December further extended the deadline to register for its domestic debt exchange to January 16 in order to “secure internal approvals” from the financial sector, according to the Finance Ministry.

The Ministry of Finance also announced a change to the debt exchange, with eight additional instruments to be created.

The ministry had previously extended the registration deadline for the domestic debt exchange to December 30, from December 19 originally.

“This extension affords the government…the opportunity to consider suggestions made by all stakeholders with the aim of adjusting certain measures,” the Finance Ministry said in a statement, echoing the language of the first extension announcement.

Under the original plan, 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.

Announcing the latest extension, the Finance Ministry said that eight additional instruments would be created, bringing the total number of new bonds to 12, with one maturing each year from 2027 to 2038.