Honorary Vice President of IMANI Africa, is alleging that Ghana’s Economic Management Team and the Presidency, are against the inclusion of individual bondholders in the domestic debt exchange programme by Finance Minister, Ken Ofori-Atta.
According to Bright Simons, the Finance Ministry, is solely holding out against the formal exemption of individual bondholders from the debt exchange programme.
This, follows strong opposition from individual bondholders who have been resisting their unilateral addition to the debt exchange programme by the Finance Ministry without any prior consultation.
They claim their involvement in the debt programme, will further erode the value of their already eroded bond values and have thus resolved to fight against the Finance Ministry’s actions.
In a Twitter post concerning the issue, Bright Simons quizzed, “How long can Finance Ministry hold out against sentiment in Ghana’s Economic Management Team that individuals must be formally exempted from the debt exchange program?”
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“And now reports of Jubilee House also moving in that direction. Ministry insists 5% in 2023 is last offer.”
With the government succumbing to pressure from individual bondholders to be exempted from the debt exchange programme, Bright Simons, noted that the Finance Ministry is becoming isolated when it comes to discussions on the programme at Cabinet.
“Meanwhile, the Finance Ministry is pretty isolated at Cabinet this afternoon. Will be interesting to see whether their nerves will hold as the rest of the government begins to buckle under pressure,” he said.
Meanwhile, the Individual Bondholders Forum which is kicking against the inclusion of its members in the government’s domestic debt restructuring programme, has given the Akufo-Addo administration some ideas it can use to save the economy some GHS83.5 billion, so as to spare them from a haircut.
The proposed measures, include enforcing property taxation and VAT invigilation, recovering funds lost to financial irregularities as identified by the Auditor-General, divesting loss-making, defunct and troubled 17 state-owned enterprises, privatising selected SOEs to Tier-2 pension funds to drive efficiency and productivity, and reviewing the Free SHS Programme to make it more efficient through effective targeting and allowing parents who can pay to do so, among others.
“The measures proposed above, per the estimation of the IBF, yield net savings of GHS83.5bn”, the IBF said in its report, adding: “The above recommendations are competent enough to urgently address the fiscal challenges and enable us to reach the desired 55% debt-to-GDP target proposed to the IMF”.
Yesterday, the Individual Bondholders Forum, petitioned Togbe Afede XIV, the Agbogbomefia of the Asogli State, to help them get an exemption from the Domestic Debt Exchange Programme (DDEP).
The Individual Bondholders are insisting on the complete exclusion of its members from the Domestic Debt Exchange Programme, stating that their inclusion, will destroy household confidence in Ghana’s financial system and securities market.
Addressing the former President of the National House of Chiefs on Thursday, the Convener of the Individual Bondholders Forum, Senyo Hosi said: “Togbe the matter is an eye red matter and for someone who has led the capital market and being one of the players who birth the capital market, besides your royal place as the Agbogbomefia of the Asogli State, you are a pioneer in this industry, I do not want to believe this is your voice and the destination you assured us when your voice was heard back then.
“So we are here to petition your office, to petition you as an individual and the state of Asogli not to sit by and watch the lives of 6.5 million people devastated and subjected to shackles of penury. So our plea here is very simple, the steps being taken by the government are unsustainable and very unnecessary.”
Individual bondholders during discussions with the committee set up by the government to resolve issues on the debt exchange programme stated that with the set target of 80% of eligible bonds, Individual Bondholders are not a critical success factor to the viability of the DDE programme, yet the impact of their inclusion has incalculable consequences.
According to the group, “beneficiaries should be students that patronize Senior High Schools in their communities, whilst other students should pay for boarding. However, the government can pay for students who do not have Senior Secondary schools in their communities.”
The group stated that divesting the 17 non-performing SOEs and reviewing the free SHS, alone will provide the government with two billion cedis.
The group also urged the government to maintain the 2022 capital expenditure level by reducing the non–ABFA MDA and foreign finance Capex provisions by 50percent which they claim will provide the 10.7 billion Ghana Cedis.
The Individual Bondholders Forum, insisted on the complete exclusion of its members from the Domestic Debt Exchange Programme, stating that their inclusion will destroy household confidence in Ghana’s financial system and securities market.
During discussions with the technical committee set up by the government to resolve issues surrounding the Domestic Debt Exchange Programme, the Individual bondholders, said their holdings through collective investment schemes stand at about GHS15.5bn, representing about 11percent of the eligible bonds and the capitalized interest.
The individual bondholders added that with the set target of 80percent of eligible bonds, Individual Bondholders are not a critical success factor to the viability of the DDE programme, yet the impact of their inclusion has incalculable consequences.
