Dr Joel Akwetey, a leading member of the Individual Bondholders Association of Ghana (IBHAG), has served notice that the association will suspend it’s boycott of the Ministry of Finance Technical Committee in order to continue engagement and advocacy for bondholders.
Meanwhile, the new position of the reversal of the Individual Bondholders Association of Ghana is a complete reversal of IBHAG’s earlier position to withdraw from the technical committee, which was announced in a news release a couple of weeks ago.
“The group will continue to participate in the deliberations of the technical committee set up by the Finance Ministry to address the concerns of Ghanaian bondholders in the domestic debt exchange programme.”
Dr Joel Akwetey
Dr Akwetey noted that given the differences in approaches of the two bondholder groupings in advocating for the interest of their respective members, disagreements are bound to boil over but they shouldn’t be allowed to stop the achievement of the goals of getting a fair deal for bondholders in the DDEP.
“We are at the moment trying to settle our differences with the IBF. Things like these are likely to happen given the different approaches used by both bodies towards a common goal. But both the IBF and IBHAG are focused on deliberations with MoF to resolve overdue coupons and principals payments.”
Dr Joel Akwetey
According to Mr Akwetey, IBHAG’s decision to rescind its decision to boycott meetings of the Technical Committee was due to a consensus among members of IBHAG for its leadership to continue to attend meetings of the Technical Committee and continue advocacy for the payments of outstanding coupons and principals.
Meeting of the Technical Committee
Last week, without officially announcing the suspension of the boycott, IBHAG sent representatives to a meeting of the technical committee, raising questions about the group’s intention.
The meeting was also attended by representatives of the Individual Bondholders Forum, whose convener, Senyo Hosi was singled out for attack in the IBHAG statement, which accused Mr. Hosi of being a sellout and becoming an “appendage of the Ministry of Finance, doing its bidding.”
The IBHAG and IBF are both organizations that represent individual bondholders in Ghana. While there have been suggestions for the two organizations to merge, they have maintained their separate identities due to their divergent approaches to tackling the issue of locked-up funds. Despite this, both organizations share the common goal of advocating for the interests of individual bondholders.
This was as a result of Ghana’s efforts to restructure its debt. Ghana defaulted on its external debts in December and has since sealed a domestic debt swap and requested a restructuring of its bilateral debts via the G20’s Common Framework vehicle.
It estimated that Ghana’s international sovereign bonds would need an average coupon reduction of 30%-50% and five-year maturity extension, with no cut in the principal value, to cover the country’s forecasted $4.5 billion financing gap in the next three years.
Meanwhile, under the Programme, domestic bondholders were asked to exchange their instruments for new ones. Existing domestic bonds as of 1st December 2022 were exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037. The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
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