Exempting individual bondholders won’t affect debt exchange - Finance expert to government

Finance Expert, Williams Kwasi Peprah, has averred that government will still meet its target if it exempts individual bondholders from its Domestic Debt Exchange Programme (DDEP).

According to him, individual bondholders constitute less than 20 percent of the domestic bond portfolio.

“If you look at the entire domestic bond portfolio in Ghana, individual bondholders are less than 20%...So, if all individual investors decide not to buy into government programme, the government will still achieve a significant 78-80% of the said target which is in the hands of institutional investors excluding pension funds which is 1%.”

The Associate Professor with Andrews University in Michigan, USA, made this known in an interview wtih Accra-based Asaase Radio on February 10, 2023.

Government under the domestic debt exchange programme is proposing an exchange where the maturity period of bonds of 12-15 years could be reduced to 5 years with the reduction of returns on bonds moved from the average of 18 and half percent to 15 percent.

Pensioners are, however, adamant about the proposal stating that the exchange programme would cause more harm than good to them.

They explained that their retirement was planned around earnings from such bond investments.

Members of the Pensioner Bondholders Forum on Monday, February 6, began picketing the Finance Ministry to demand a total exemption of their investments from the Domestic Debt Exchange programme.

Friday, February 10, 2023 was the fifth time members of the forum showed up at the finance ministry.

Former Chief Justice, Sophia Akuffo, who joined the demonstration described government's move to include pensioners in the debt exchange programme as wicked, disrespectful and unlawful.

According to her, it is wrong for government, through the Ministry of Finance to sacrifice pensioners' hard-earned monies to save government after serving the nation.

While bemoaning the negative impact of the debt exchange programme on pensioners in an interview with GhanaWeb Business, Sophia Akuffo stressed that it was heartbreaking to see her age mates and others older go through pain.

Meanwhile, Bondholders Forum has said it will be in Parliament to observe proceedings as the Minister of Finance, Ken Ofori-Atta, makes an appearance before the House Business Committee on February 16.

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