The government of Ghana, led by His Excellency President Nana Akufo Addo, has extended the deadline for the Debt Exchange Programme to Tuesday January 31, 2023, to enable government build consensus among stakeholders for the programme.

This is the third time the government has extended the deadline for the bondholders to voluntarily exchange their bonds for new ones. At the moment, it is unclear how many institutions or individuals have signed onto the programme which has been rejected by several groups.

The crisis-hit country launched a domestic debt exchange at the start of December, days before concluding a staff-level agreement with the International Monetary Fund (IMF) for a $3 billion rescue package. The deadline for the debt swap, initially set for December 19, had previously been extended to Dec. 30 and then to today January 16.

However, the Ghana Association of Banks (GAB) has directed commercial banks not to sign onto the amended debt exchange offer over uncertainty surrounding the impact of the debt restructuring on the banking industry.

The association wants its concerns addressed before accepting the debt exchange offer, according to a letter sent to managing directors of banks. GAB told member banks that may want to consider the debt exchange in its current form to formally inform the association first before doing so.

“From the uncertainty surrounding the programme, GAB recommends that all banks must stay any further movement on the exchange until our demands have been met. However, in the event that a bank may have to move forward to exchange, the MD/CEO must inform the CEO of GAB directly of the decision.”
GAB

The decision was made after a high-level multi-stakeholder meeting involving GAB, the Vice President, the Minister for Finance, debt management advisors, and financial sector regulators including the Bank of Ghana.

The letter suggests that the leadership of the banking group at the meeting put forward several demands to mitigate the impact of the domestic debt exchange programme on the banking sector.

Parliament Didn’t Have Details Of Domestic Debt Exchange

Meanwhile, the Majority Leader, Osei Kyei-Mensah-Bonsu has revealed that Parliament was not presented with the details of the Domestic Debt Exchange Programme before the announcement by the Minister of Finance, Hon Kenneth Ofori-Atta.

The MP, who was speaking in an interview today January 16, noted that there were broad discussions about the economy but parliament did not have the details of the debt exchange programme.

“There were meetings before the budget came to be consummated and later on presented by the Finance Minister, so we had broad discussions, but the full information were not known to us at the time. Some consultations went on as to where exactly we were as a nation. I am not too sure that this matter came up for discussion. Maybe the broad strokes were mentioned but not the details.”
Osei Kyei Bonsu

Mr Kyei-Mensah-Bonsu also reiterated his earlier call to the Finance Minister to undertake extensive consultations on the debt exchange programme to allow bondholders better understand their options.

On Friday, January 13, the Minister for Parliamentary Affairs said involving individual bondholders in the Domestic Debt Exchange programme could wipe out the middle class and negatively affect the savings culture of Ghanaians.