Professor Williams Peprah, an Associate Professor of Finance at Andrews University in the United States, has called for the government to seek funding from the Treasury market in order to settle matured investments.
The leading expert in finance is urging government to treat calls for the settlement of bondholders’ investments as a matter of urgency, given the age of the pensioners involved.
Professor Peprah’s advice comes as the Pensioner Bondholders Forum continues to stage pickets outside the Ministry of Finance in Accra, demanding that the government pays all outstanding coupons and principals owed them. The protests resumed on May 8, 2023, and are set to continue until further notice.
In an interview, Professor Peprah noted that if the government were to focus solely on paying the coupons owed bondholders in the interim, it could help alleviate some of the pressure on the government.
He further suggested that the government could swap some of these coupon and principal payments and factor them into the Treasury bill demands in order to make payments to pensioners.
“If the government cannot pay the principal, the coupon payment can be factored into the cash flow demands from the Treasury bills side and be paying them; at least that will slow down the pressure.”
Professor Williams Peprah
He went on to urge the government to engage with pensioners and listen to their demands, saying that all they are asking for is “some cash so that they will be able to take care of their medical needs”.
Professor Peprah also emphasized the urgency of the situation, pointing out that many pensioners depend on these assets and that “life is at stake now and it’s getting very critical”.
The Professor stressed on the fact that many pensioners rely on fixed income from the bond market and that the coupon payments are critical for their financial stability.
Bond Hurdles Facing Governments Across The World
The situation in Ghana highlights the challenges facing governments around the world as they seek to balance the demands of bondholders with the needs of their citizens.
The pressure on governments to honor their debt obligations is increasing as bondholders become more vocal and organized in their demands.
At the same time, governments are under pressure to provide social services and support for vulnerable populations, particularly in the wake of the COVID-19 pandemic.
The situation in Ghana is also a reminder of the importance of financial planning and risk management. While pensioners may have invested in the bond market with the expectation of receiving a fixed income, there are always risks involved in any investment.
As such, it is important for individuals and governments alike to plan for a range of scenarios and to have contingency plans in place in the event of unexpected challenges.
In the case of Ghana, it remains to be seen how the government will respond to the demands of the Pensioner Bondholders Forum.
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