Making reference to the recent agreement reached between the Government of Ghana and the Ghana Association of Banks (GAB), the Convener of the Ghana Individual Bondholders Forum, Senyo Hosi, has restated the need for government to exclude Individual Bondholders and Collective Investment Schemes (CIS) from the Domestic Debt Exchange Program (DDEP).
Appreciating efforts made between both parties (Government & GAB) in reaching a deal towards reengineering the state of the economy, the Convener disclosed that the acceptance by banks to implement DDEP in their operations is enough for government to reach its desired target of 80%.
“We observe with delight government’s various incentives provided to the banks which among others include the Bank of Ghana’s forbearances and favorable revisions to the prudential rules including reductions in the Capital Adequacy Ratio and the Cash Reserve Requirements.
“To make it much more functional, the government will be providing a financial stability fund to support the viability of the banks. With the banks onboarding the Domestic Debt Exchange Programme, the government is set to reach its 80% target.”
Senyo Hosi
He has therefore urged government to revise its decision to add individual bondholders to the debt exchange Program since they constitute less of the eligible bonds to reach the desired target.
“The new development of GAB’s agreement to the DDEP reaffirms the need for government to exclude Individual Bondholders, including individuals and Collective Investment Schemes (CIS), who account for less than 11% of the eligible bonds. Unlike the banks and other institutions who are set to benefit from various regulatory incentives, Individual Bondholders have no fall back nor incentives and will be condemned to shackled penury.”
Senyo Hosi
Consider The Plight Of Individual Bondholders
Senyo Hosi, speaking on behalf of the individual bondholders indicated that the initiative currently presented to individuals is the harshest on any investor category and catastrophic to the livelihoods of the bond holders as well as their dependents. “Unlike other investor categories likely to benefit from the Financial Stability Fund, Individual Bondholders have no support to fall back on,” he added.
The Convener of the Ghana Individual Bondholders has therefore beseeched government to oblige to its promise to protect individuals and groups against human rights abuses. The obligation to fulfill means that States must take positive action to facilitate the enjoyment of basic human rights, hence taking hold of individual’s hard-earned money used in investment is an infringement on their right.
“We urge the government to stay focused on its responsibility to protect its citizens and for that matter, absolutely exempt Individual Bondholders, including individuals who hold eligible bonds under the DDE through Collective Investment Schemes from the DDE programme.
“We maintain that cutting government expenditure and optimizing revenue is the sure winner for Ghana in these difficult times. Proverbs 14:31 says ‘whoever oppresses a poor man insults his Maker, but he who is generous to the needy honors the Lord’. May our government be honored.”
Senyo Hosi
The government on Monday announced that it had revised some terms of its Domestic Debt Exchange Programme following discussions with the Ghana Association of Banks.
Hitherto, the new bonds under the programs were not to accrue any interest until 2024, starting at 0% coupon in 2023 which steps up to 5% in 2024 and 10% from 2025.
But after the engagements between the bankers and the Ministry of Finance, bondholders will now enjoy a 5% coupon in 2023.
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