Organised Labour Declares Strike Over Possible Use Of Pension Funds For Debt Exchange Programme

• Organised labour has announced plans to begin an indefinite strike from Tuesday, December 27, 2022 over attempts by the government to touch pension funds
• There are rife projections that the cash-strapped Akufo-Addo administration may dip its hands into the pension funds to deal with unsustainable domestic debts under a debt exchange programme
• However, organised labour say they want an express assurance from the government that pensions won't be touched before they rescind their indefinite strike

Organised labour has declared an indefinite strike from Tuesday, December 27, 2022 over proposals by government to touch pension funds as part of its debt exchange programme.

They want the government to give them assurance that workers' pension funds will not be affected by the programme.

The debt exchange programme announced by the government is aimed at managing its unsustainable debt, prevent default and stabilise the troubled economy.

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Ghana labour unions call for strike over local debt swap

In the programme, the finance minister Ken Ofori-Atta announced that institutional bondholders would be required to exchange their bonds for new ones, among others. But experts fear pension funds could be used to deal with the domestic debt crisis.

Organised labour believes the fears expressed by the experts are viable and has taken steps to pre-empt any attempt by the government to touch their pension.

“We are asking government to exempt us from the debt exchange programme. We have already told the world that if government doesn’t do that, we will advise ourselves...We are here to announce the advice.

"The advice is very simple. We have all agreed that because the government has refused to grant our request, we have decided firmly that all workers of Ghana are going to strike on December 27, 2022, and we will be on strike until our demands are met,” Secretary General of the Trades Union Congress (TUC) Dr. Yaw Baah told the press on Monday, December 19, 2022.

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He also said private workers must join the strike because what government intends to do could affect them too.

Ofori-Atta Announces Plans To Swap Cedi Debts for New Bonds In Domestic Debt Exchange Scheme

Meanwhile, YEN.com.gh reported in a previous story that Ken Ofori-Atta on the evening of Sunday, November 4, 2022, announced to local bondholders that there would be losses on interest payments under the Domestic Debt Exchange programme.

The finance minister explained Ghana will swap existing local-currency debt with four new bonds maturing in 2027, 2029, 2032, and 2037.

“The annual coupon on all these new bonds will be set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity,” he said in the video posted late Sunday on the Ministry of Information’s page. Coupon payments will be semi-annual.

It has been speculated that the cash-strapped government is very likely to touch pension funds to manage its debt situation.

Source: YEN.com.gh