Debt restructuring: Losses will be bigger than what is being proposed – Dr. Theo Acheampong

Economist Dr. Theo Acheampong has shared his thoughts on Ghana’s Debt Exchange Programme.

On Monday, December 5, Finance Minister Ken Ofori-Atta launched the Debt Exchange Programme at a media briefing.

Under the Debt Exchange 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.

Speaking at a forum organised by Media General on the theme "Debt Restructuring: What it means for your investment," Dr. Theo Acheampong said there will surely be losses.

According to him, the losses will be more than what is anticipated in the Debt Exchange Programme.

“Let no one say that there won’t be losses, there will be losses. The amount of losses is much more going to be bigger than what is being proposed,” Dr. Theo Acheampong said at the forum organised on Thursday, December 8.

Meanwhile, government says it is determined to protect the investments of Ghanaians under the Debt Exchange Programme.

Finance Minister Ken Ofori-Atta while announcing the programme said 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.