Mr Anthony Degbato, a senior manager in the funds management department of the Securities and Exchange Commission (SEC), has called on investors across the country to remain calm and not engage in panic withdrawals, while stressing that there will be no haircut on Investments.

The Securities and Exchange Commission Senior Fund Manager noted that despite the country’s current economic challenges, investors must have confidence in the Ghanaian economy and rally behind the managers of the economy to turn things around.

“This is the time to actually invest, so we would encourage people to stay invested, rather than panic. There is no panic situation at hand. So, let investors still stay invested if they don’t wish to add up to their investment. They should stay invested. All these fluctuations in the value of funds will be corrected.”
Anthony Degbato

Mr Anthony Degbato stressed that there will be no haircut on investments. He thus, explained that a haircut is a lower-than-market value placed on an asset when it is being used as collateral for a loan.

“The haircut discussion has been dealt with by the President categorically, and if such a thing will crop up, I am sure that the public will be made aware. Keep calm and carry on.”
Anthony Degbato

The assurance comes amid fears that principal and interest on investment could be affected if Ghana secures a deal with the International Monetary Fund (IMF).

Haircut Must Happen

However, the Director of Strategy and Business Operations at Dalex Finance, Joe Jackson, is doubting the assurances that there will be no haircuts on investments resulting from a possible debt restructuring.

Mr. Jackson, who thinks otherwise, said haircuts must happen if the government wants to move the country from the economic mess that has bedevilled the country.

“Haircuts happen all the time, it happens in different jurisdictions, so why is it that we think that Ghana is broke, Ghana cannot pay its debt and yet you can get away with the haircut? Forgive me, it has to happen if we have to get out of this mess… Since we are discussing it, it shows that there is crisis in the horizon.”
Joe Jackson

The country has witnessed an astronomical increase in fuel prices at the various pumps, coupled with high prices of food and services, as well as the depreciation of the cedi.

While urging Ghanaians to rally behind government’s efforts at turning around the economic crisis, the President of the Republic, Nana Addo Dankwa Akufo-Addo, in his address assured that, Government is working to secure reliable and regular sources of affordable petroleum products for the Ghanaian market. “It is expected that this arrangement, when successful, coupled with a stable currency will halt the escalation of fuel prices and relief to us all”.

Meanwhile, a haircut in debt restructuring is yet another unique use of the term “haircut” in finance. Specific to debt restructuring, a haircut is the reduction of outstanding interest payments or a portion of a bond payable that will not be repaid. This condition may arise when a company or country considers restructuring its debt and negotiates new terms with existing bondholders.