Ghana’s Domestic Debt Exchange to be launched today

The Minister of Finance, Ken Ofori-Atta will launch Ghana’s Domestic Debt Exchange today, Monday, December 5.

The Minister disclosed this on Sunday, December 4 when he provided an update on discussions on the country’s debt operation programme.

“In the Budget Statement presented to Parliament on November 24th, I announced that government will undertake a debt operation programme. The broad contours of the Debt Sustainability Analysis has been concluded and I am here this evening to provide some details on Ghana's Domestic Debt Exchange which will be launched tomorrow. External debt restructuring parameters will be presented in due course,” Ken Ofori-Atta said.

He said under the Programme, domestic bondholders will be asked to exchange their instruments for new ones. Existing domestic bonds as of 1st December 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.

The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity whilst coupon payments will be semi-annual.

According to the Finance Minister, the government is keen on restoring macroeconomic stability in the shortest possible time.

“Our commitment to Ghanaians and the investor community, in line with negotiations with the IMF, is to restore macroeconomic stability in the shortest possible time and enable investors to realize the benefits of this Debt Exchange,” Ken Ofori-Atta said.

As parts of efforts to minimise the impact of the domestic debt exchange on investors holding government bonds, particularly small investors, individuals, and other vulnerable groups, the Finance Minister has assured that Treasury Bills are completely exempted from haircuts and all holders will be paid the full value of their investments on maturity.

“There will be NO haircut on the principal of bonds. Individual holders of bonds will not be affected,” Ken Ofori-Atta added.