Debt Exchange: Individual Bondholders Say They Will Lose 88.2% Of Their Funds At Current Inflation Rate

• Individual bondholders say if they are included in the domestic debt exchange programme like the government is planning to do, they will lose almost all their investments due to high inflation
• The bondholders said in a statement that there are better options the government can explore to deal with the country's debt crisis
• They also petitioned Parliament on January 13 over the plan by the finance minister Ken Ofori-Atta to include individual bondholders to the programme

Individual bondholders say per the current inflation rate, they will lose about 88.2% of their investment if government includes them in the domestic debt exchange programme.

Organizing themselves under the Ghana Individual Bondholders Forum, the group said in a statement that although the president has promised that they will not lose funds on their coupons [or there will be no haircuts], they foresee the exact opposite.

Read also

Iraq's currency in flux as foreign transfers come under scrutiny

“With [government's] set target of 80% of eligible bonds, Individual Bondholders are not a critical success factor to the viability of the DDE programme as you envisage, yet the impact of their inclusion has incalculable consequences,” the statement said.

They have pleaded with president Nana Akufo-Addo and finance minister Ken Ofori-Atta to exclude individual bondholders in the debt exchange programme.

“Save 1.3 million livelihoods and dependents from shackled penury”, the statement appealed further.

Individual Bondholders petition Parliament over plans to include them in debt exchange programme

Meanwhile, on the afternoon of Friday, January 13, 2023, representatives of the 1.3 million individual bondholders stormed Parliament with a petition.

According to a Facebook post by IMANI Center for Policy Education's Franklin Cudjoe, the leadership of Parliament has received the petition from reps of investors who will be affected by government’s debt restructuring programme.

Read also

NPP MP appeals to appeals to Ofori-Atta to urgently review inclusion of individual bondholders

Over 10,000 bondholders have signed up to the petition.

Parts of the petition read:

"We are unaware of any parliamentary approvals, directly or indirectly that the managers of the DDE have been granted to make unilateral decisions over financial arrangements originally clad with binding contracts.

"If that was the case, your office would have invoked the principles of fair and impartial hearing for both parties, in this case, Individual Bondholders and assigns of the DDE programme to justify their positions....this has been the basic approach adopted in other jurisdictions that ever dealt with creditors in a domestic debt exchange programme."

The bondholders say there are people among their group who possess technical and policy skills and are willing to assist government explore viable options to dealing with the country's debt crisis.

Government backtracked an earlier promise that it will not include individual bondholders in the exchange programme late December 2022.

Read also

Ofori-Atta laments 30% base pay increase for public workers; says it will affect 2023 budget

The finance ministry stated, among other things, that there would be eight new instruments to the composition of the new bonds for a total of 12 new bonds, one maturing each year starting January 2027 and ending January 2038. 

But the bondholders fear inflation will eat away their investments, while others, the elderly, fear they may pass away before 2038.

Martin Kpebu Rallies Ghanaians Against Programme, Says Treasury Bills May Be Next Target

Already, YEN.com.gh reported in a separate story that a private legal practitioner is rallying support against the Domestic Debt Exchange programme.

Martin Kpebu is convinced that there must programme must be resisted because the government will soon include treasury bills under the next phase of the programme.

He has thus described the programme in its current form as problematic and not in the nation’s best interest.

Source: YEN.com.gh