The Minority in Parliament has rejected government’s announced plan in bringing the country’s debt levels within sustainable levels.
Addressing the media in Parliament, Minority Leader, Haruna Iddrisu warned the way government is going about the debt restructuring program will be inimical to investors and the economy at large.
The Tamale South MP questioned the refusal of the government to involve investors and parliament in such a move before the announcement.
““Let me state, without any fear of contradiction, that the form and structure of the debt restructuring plan announced by Ken Ofori-Atta is unacceptable to us, and we simply will not accept it.”
“I shudder to ask how come that the contours of this debt exchange programme was not announced in the Budget statement that was presented to parliament. Were investors consulted? Bondholders were they consulted? How did he come to this conclusion? Are we not right to state that this amounts to an economic imposition…”
Domestic Debt Exchange
Government has announced the modalities of a domestic debt exchange following the conclusion of Debt Sustainability Analysis as part of negotiations with the International Monetary Fund(IMF).
In line with the programme, domestic bondholders are billed to exchange their instruments for new ones, Finance Minister Ken Ofori-Atta said in a televised announcement on Sunday.
According to him, existing domestic bonds as of 1st December 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032, 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. Coupon payments will be semi-annual,” said the Finance Minister.
Meanwhile, the Finance Minister stressed “There will be NO haircut on the principal of bonds, adding Individual holders of bonds will not be affected.
Also, Treasury Bills were exempted from the haircut as holders will be paid the full value of their investments on maturity.
However, the external debt restructuring parameters will be presented in due course, Mr Ofori-Atta said.