Government Spokesperson on Finance and Economy, Manasseh Atta Boateng has assured individuals, organisations and Corporate entities that their monies invested in bonds or even treasury bills will never be affected by the Domestic Debt Exchange programme.
He observed that some people fear there will be “haircuts” when the Domestic Debt Exchange Programme and have therefore decided to go and withdraw their money.
The government last Monday launched the Domestic Debt Exchange programme which was first announced in the 2023 budget.
The programme involves the swapping of existing domestic bonds with longer-dated bonds that will take between five and 14 years to mature in 2037.
This means the extension of the repayment period for the bonds issued and held locally to allow for a staggered and phased payment of both the interest and the principal.
The annual coupon on all of these new bonds will be set at zero per cent in 2023, five per cent in 2024 and 10 per cent from 2025 until maturity.
It does not affect treasury bill holders but institutional and individual bondholders registered in the Central Securities Depository (CSD).
However, a couple of hours after the announcement, a number of stakeholders and institutions raised concerns about the arrangement and sought various clarifications, with almost all the groups claiming they had not been consulted.
While the Minority in Parliament said the form and structure of the exercise were counter-productive and it would, therefore, not accept it, the Trades Union Congress (TUC) indicated that it was concerned about the programme’s potential negative impact on workers’ pensions.
A financial advisory firm, Deloitte Ghana, on the other hand, sought some clarity on whether investors would have the option of immediately liquidating their investments or be forced to roll over onto the new programme.
The Ghana Registered Nurses and Midwives Association (GRNMA) also expressed dismay and disappointment at the development, saying pension funds were a collection of contributions of individuals and the managers alone could not decide for all.
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Speaking on Atinka TV’s morning show, Ghana Nie with Ekourba Gyasi Simpremu, Manasseh Atta Boateng said, “When the Domestic Debt Exchange program was announced in the 2023 budget, some people were concerned that their funds would be affected. Some have also misquoted the government and the entire situation, claiming that certain aspects of the program are false.
Some people are also instilling fear in others, causing them to withdraw their money or risk losing it, but we assure you that no one will lose their money.”
He added that, “Someone once said that if you do a treasury bill but do not withdraw the money, you will never get your money back; this is never true. If you have done a Treasury bill, do not worry about going and withdrawing your money; your money is intact; next year, when you withdraw it after three months or six months, you will get the interest you are expecting; if you want to withdraw it, you can do so; and we are pleading with people to calm down about the mad rush to withdraw their money.”