Ghana Federation of Labour reject domestic debt exchange programme

Mr Abraham Koomson, Secretary General of the Ghana Federation of Labour (GFL) has reiterated that Organized Labour, which comprises all registered trade unions and workers’ associations, still stand by their position against the government’s domestic debt exchange programme.

Mr Koomson, in an interview with the Ghana News Agency (GNA) Tema, said organized labour has vehemently opposed the debt exchange programme.

He, therefore, called on the government to respect the position of labour unions to avoid any labour unrest in the country.

He stressed that the resolve to oppose it was because it would have adverse effects on workers and pensioners.

“Organized Labour vehemently opposed to government’s announced of domestic debt exchange programme to satisfy the International Monetary Fund (IMF) conditions for a bailout from the self-inflicted economic mess,” he said.

The GFL Secretary General added that, “various workers’ organizations have spontaneously reacted against this programme having considered the devastating consequences on workers’ pensions, and other investments when implemented.”

According to him, the government had not demonstrated good faith in discussions with organized labour prior to opting for IMF support in addressing Ghana’s economic crisis.

He said it was on record that the government never considered going to IMF as a progressive alternative to revive the ailing economy.

“The 13 affiliate unions of GFL were taken aback by the government reneging on its assurance in Parliament never to seek IMF assistance in dealing with Ghana’s economic challenges,” he started.

The Ministry of Finance on December 04, 2022, announced its domestic debt restructuring programme; noting that “Under the Programme, domestic bondholders will be asked to exchange their instruments for new ones.”

Also under the programme, existing domestic bonds as of December 1st, 2022, would be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.

“The annual coupon on all these new bonds will be set at zero percent in 2023, 5 percent in 2024 and 10 percent from 2025 until maturity. Coupon payments will be semi-annual.”

Treasury Bills were, however, completely exempted and all holders will be paid the full value of their investments on maturity, according to the Finance Ministry.

The Ministry also noted that there would be no haircut on the principals of bonds, while individual holders of bonds would not be affected.