Following the conclusion of the Debt Sustainability Analysis as part of discussions with the International Monetary Fund (IMF)., the government has disclosed the specifics of a local debt swap.
Domestic bondholders are expected to exchange their current instruments for new ones in accordance with the scheme, Finance Minister Ken Ofori-Atta stated in a televised statement on Sunday.
He claims that domestic bonds that are now outstanding as of December 1, 2022, will be swapped for a group of four new bonds with maturities 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. Coupon payments will be semi-annual,” Mr Ofori-Atta stated.
The Finance Minister in the meantime emphasized that “there will be NO haircut on the principal of bonds,” adding that individual bondholders would not be impacted.
Additionally, Treasury Bills were excluded from the haircut since holders would get the entire investment value at maturity.
The Finance Minister stated that the general conclusions of the debt sustainability study have been reached and that the details of Ghana’s domestic debt exchange would be unveiled on Monday, December 5, 2022.
Mr. Ofori-Atta did say that the external debt restructuring guidelines would be released in due time.
Contrary to rumors, President Nana Addo Dankwa Akufo-Addo has promised that there will be “no haircuts” on investments.
“I also want to reassure every Ghanaian that no investor—individual, institutional, or pension fund—in Government treasury bills or other instruments would lose money as a result of our on-going IMF deliberations.
President Akufo-Addo said in his address to the nation on Sunday night, October 30, 2022, “There will be no ‘haircuts,’ so I urge all of you to disregard the false rumors, just as, in the banking sector clean-up, Government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits.”