‘Ghana is broke’, bear with government over its domestic debt exchange programme — Joe Jackson to investors

By Jacob Agyenim Boateng || Contributor
Headlines Mr Joe Jackson
DEC 6, 2022 LISTEN
Mr Joe Jackson

Renowned Financial Expert and the Chief Executive Officer of Dalex Finance, Mr Joe Jackson has urged the public to bear with government over its domestic debt exchange programme.

According to him, Ghana is "broke" to a point that, it will find it very difficult to fulfil full obligations for domestic bondholders.

He opined that the only way for Ghana to get support from the International Monetary Fund (IMF) was for government to restructure domestic bonds to ease pressure on the economy.

Mr Jackson was reacting to government's domestic debt exchange programme which was announced by Finance Minister Ken Ofori Atta on Sunday, December 4, 2022.

Speaking on the Kumasi-based OTEC 102.9 FM's morning show "Nyansapo ", a day after the announcement, Mr Jackson said the country’s economy may collapse if domestic bondholders reject the restructuring measures and try to force government to fulfil the end of its bargain on all local bonds.

Trouble for Ghana's Economy
Mr Joe Jackson in his submission, however, emphasized that government is handicapped in this particular instance, adding that it will be fatal for the economy if government is forced to halt the domestic debt exchange programme.

He has thus called on all including Parliamentarians to treat the matter devoid of partisan lines and put Ghana first in this discussion.

Domestic Debt Exchange Programme
Government as part of measures to restore the ailing economy announced its domestic debt exchange programme.

These measures as announced by Finance Minister Ken Ofori-Atta include some exemptions and external debt restructuring parameters that will be implemented.

Per his release, treasury bills and individual bondholders will not be affected by the move.

However, domestic bondholders will be compelled to exchange their instruments for new ones.

“Existing domestic bonds as of December 1, 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% in 2025 until maturity.

“Coupon payments will be semi-annual,” the Minister said.

Minority's Rejection
Meanwhile, the Minority in Parliament has vehemently rejected government’s proposed debt restructuring programme.

The caucus is of the view that the policy is unacceptable and cannot be allowed to proceed.

The Minority Leader Hon Haruna Iddrisu has therefore warned that his side will use every legitimate means to oppose the move.