Pensions will be protected against Debt Exchange – TUC assures workers

The Trades Union Congress(TUC) has assured that it will take steps to safeguard workers’ pensions amid the implementation of government’s Domestic Debt Exchange (DDX) Programme.

In a statement issued on Monday, the TUC expressed disquiet about the failure of government to engage Labour ahead of the launch given that substantial portion of workers’ pension is invested in government bonds.

Nonetheless, the TUC appealed to all workers and unions to remain calm as it works to protect retirement funds.

“We have taken special note of the statement by the Minister for Finance that the Debt Exchange Programme is voluntary. The TUC will scrupulously analyse the propriety or otherwise of the participation of pension funds of its members in the programme.

“We are assuring workers, that the TUC and its Affiliate unions will do everything in our power to ensure that our members are fully protected and that not even a pesewa of pension funds is lost in the Debt Restructuring Programme.”

Government offered investors a domestic debt swap on Monday to ease a crunch in payments as the government negotiates an IMF bailout.

The debt exchange program which took effect Monday would swap current debt for four new bonds maturing between 2027 and 2037.

Speaking at the launch on Monday, December 5, 2022, the Finance Minister said the Programme seeks “to invite holders of domestic debt to voluntarily exchange approximately GH¢137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic.”

Mr. Ofori-Atta believes the time is now for action to be taken as the economy is in a perilous state.

“The Debt Sustainability Analysis (DSA) demonstrated unequivocally that Ghana’s public debt is unsustainable, and that the Government may not be able to fully service its debt down the road if no action is taken. Indeed, debt servicing is now absorbing more than half of total government revenues and almost 70% of tax revenues, while our total public debt stock, including that of State-Owned Enterprises and all, exceeds 100% of our GDP. This is why we are today announcing the debt exchange, which will help in restoring our capacity to service debt.”

Meanwhile, a foreign debt restructuring programme is billed to be presented later, he said.