Debt Exchange programme shouldn’t affect pensions, investment returns — UTAG rejects programme

The University Teachers Association of Ghana (UTAG) is the latest labour union to kick against and rightly rejected government debt exchange programme announced by Finance Minister Ken Ofori-Atta.

As part of measures to breath life into the economy the government has launch a debt restructuring programme which labour has kicked against.

Under the Programme, domestic bondholders have been asked to exchange their instruments for new ones.

Also, existing domestic bonds, as of 1 December 2022, will be exchanged for 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”, he announced Sunday evening (4 December 2022).

Coupon payments will be semi-annual.
UTAG reacting to these measures in a statement said it takes serious exception to any intervention that would worsen the plight of the already impoverished University Lecturer.

“In particular, we reject the wholesale implementation of the recently announced debt exchange programme,” the statement noted.

The lecturers said they are convinced that the debt exchange programme may negatively affect the Ghana Universities Salary Superannuation Scheme (GUSSS) as well as their Tier Two and Three Pension Funds.

“It would also result in significant reduction in the principal and/or interest payments due members who have invested in mutual funds and may need resources to meet emergency needs,” they added in their statement.

Again, given that the individual savings of many of their members are lodged with the various Credit Unions on their campuses, part of which have been invested in bonds, the lecturers noted that any attempt at wholesale implementation of the announced debt exchange programme would ultimately harm the savings of their members.

“We, therefore, reiterate our vehement opposition to any straight-jacket implementation of the announced debt exchange programme. It should not, in any way, affect the pensions and other investment returns of the hardworking Ghanaian,” the statement stressed.

The lecturers cautioned the government to consider the genuine concerns raised by various stakeholders and rethink the debt exchange programme as UTAG is willing to brainstorm and support Government to find lasting solutions to address the current economic challenges.

Source: Classfmonline.com