Ken Ofori Atta, the Finance Minister of Ghana, against the stipulated deadline for the Domestic Debt Exchange Programme (DDEP) – January 31, 2023, has intended announcing revisions made to the DDE for the Individual Bondholders Association of Ghana (IBHAG) today, January 30, 2023.
This is following several petition of IBHAG to the government to be totally exempted from the programme.
This decision arrived at by the Finance Minister and his committee came after he met with IBHAG on Friday, January 27, 2023 in his office.
“The Finance Ministry understands the unique place of individuals as enumerated by the Individual BondHolders Forum (IBF) leadership.
“The Finance Minister will provide a revised DDE offer on Monday for individuals to consider to participate if they desire. It’s purely optional.”
Senyo Hosi, IBF Convener
The press release from Mr. Hosi further noted that the government will fulfill its commitments to those who choose to keep their original bonds, however indicated, it will not be held responsible for any events in the secondary market.
“For this matter, the Finance Minister cannot assure market liquidity for the old bonds. He believes the benchmark bonds will be more tradable as more will be in circulation.”
Senyo Hosi
Subsequently, the Minister of Finance welcomed the recommendations from the IBF report submitted to the MoF, which suggest achieving debt sustainability through fiscal adjustments, revising the DDE proposal for structured groups, and combating corruption, among other things.
Meanwhile, Martin Kpebu, speaking about what to be expected from the Finance Minister’s announcement said Ken Ofori-Atta, may, in the coming days, offer a new debt agreement for individual bondholders.
According to Mr. Kpebu, his perspective stems from the fact that despite being assured by the Minister to be paid their coupons and principals as they fall due, the Finance Ministry is yet to release a statement to that effect despite their meeting on Friday.
“So what is clear is that he (Finance Minister) may come up with better terms like a last-minute charm. It is possible that in his bid to woo us to come on board, they would offer better terms, for the individual bondholders. As it stands now it is zero coupons for this year, and the next 5%, etc.”
Mr. Kpebu
Explaining further, Mr. Kpebu stated that the Ghana Association of Banks (GAB) had a similar experience when they reached a revised agreement with the Finance Minister, which included improved terms for the debt exchange program.
IBHAG Is Emphatic About Holding Their Old Bonds
IBHAG is emphatic about its decision to keep its old bonds irrespective of government’s decisions.
Based on the prior experience with bankers, Mr. Kpebu is of the view that the Finance Minister may make similar attempts to ensure individual bondholders agree to join the programme but also indicated that the bondholders were emphatic about keeping their old bonds.
“We were very clear that what we are holding is sufficient for us. We were also very clear that we are already helping with the programme because we are in the cost of living crisis, the increase in prices and so on. So, to the extent that we are bearing the brunt of the cost of living crises, that in itself is sharing the burden.”
Mr. Kpebu
Mr. Kpebu, though confirmed government’s agreement to pay their coupons to them during an interview on Saturday, January 28, 2023.
“We have learned with great relief, the promise by the Finance Minister to pay Individual Bond Holders their coupons and principals as they fall due, thus, effectively exempting us from the DDEP. This promise was made at a meeting of our Representatives and the Finance Minister on Friday, January 27, 2023 in his office.
“We look forward to a written communication of the promise for ease of reference among other reasons.”
Mr. Kpebu
In his concluding remarks, Mr. Kpebu appreciated the Finance Minister and his technical team for their massive cooperation, also expressing joy at government’s finalization on its deal with the banks, insurance companies and securities industry companies on the DDEP.
Mr. Kpebu further urged all IBHAG members to remain calm, also advising that they maintain their position in not going for the new bonds.
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