The Ghana Securities Industry Association (GSIA) has iterated its commitment to a “fair” domestic debt exchange programme.
Reacting to the development in a statement, the Governing Council of GSIA welcomed the Ministry’s decision. According to the Ghana Securities Industry Association, helping to achieve the domestic exchange program will help to “contribute to overcoming our economic challenges”.
“This is critical to ensure equity and fair treatment of all Individual Bondholders and will further make the exchange program more progressive.
“The Ministry’s position that it will use this period “to further engage with stakeholders, especially individual bondholders to mitigate any adverse impacts is also heart-warming given that we also reiterated that the commercial terms of the amended offer fell below our expectation.”
GSIA
GSIA, meanwhile, lauded the finance ministry’s decision to rope in individual bond holders into the debt exchange program and also recommended the ministry to include other sectors into the program.
“We take this opportunity to remind the Ministry of our unwavering position that Individual Bondholders should include persons who hold bonds directly and those who hold bonds indirectly i.e. individuals having shares/units in Collective Investment Schemes that have invested in government bonds and persons on whose behalf bonds are held for in Trust Accounts, a position also espoused by the Ghana Individual Bondholders’ Forum.”
GSIA
This is coming on the back of the extension of voluntary participation in the programme again to Tuesday, 31st January, 2023, as the government scrambles to find a solution to the country’s worsening economic condition. The previous deadline expired at 4:00 PM on Monday, 16th January, 2023.
Announcing the extension in a tweet, the Office of the Finance Minister said building consensus is key to a successful economic recovery for Ghana. “Pending further stakeholder engagement with institutional and individual investors, recently invited to join the debt exchange programme, the government is extending the expiration of the DDE to 31 January 2023.”
The Invitation to Exchange is an arrangement through which holders of Eligible Bonds will submit their holdings of Eligible Bonds governed by Ghanaian law and denominated in Ghanaian Cedis (GHS) for new benchmark Government of Ghana bonds with the same aggregate principal amount, and which have in the aggregate a lower average coupon and extended average maturity than the Eligible Bonds.
Ghana is facing a very challenging economic situation amid an increasingly difficult global economic environment. The country’s fiscal and debt situation has severally worsened at a time when investor concerns triggered capital outflows, loss of external capital market access and rising domestic borrowing costs.
These adverse developments have exposed Ghana to a surge in inflation, a large exchange rate depreciation and have increased stress on the financing of its budget.
