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Debt Exchange: Engage further, negotiate acceptable terms – Govt told

The government has been told to take advantage of the rejection of the debt exchange programme from individual bondholders and engage them to negotiate acceptable terms.

Financial Analyst, Mr Joe Jackson said the government must do this quickly in order to get the programme started as part of debt sustainability measures.

If the programme fails, he said, it would spell doom for the country.

Speaking on the Ghana Tonight show with Alfred Ocansey on TV3 Wednesday, January 11, he said “if we don’t get this debt exchange programme through then we will not be able to achieve our debt sustainability, then the IMF programme will either be delayed or may even be at risk.

“Up until now, the markets have been treating us kindly because everybody’s assumption is that somewhere in February or March IMF is coming through. If we don’t achieve our debt right, if we have to stress them again then IMF will not come when it is due or back off and then, the chaotic debt reforms we are trying to prevent will now happen with all the dark consequences of not being able to access any funds anywhere.

“Take current requests from groups as an opportunity to engage quickly and use this opportunity to negotiate acceptable terms so that the domestic programme will go ahead if not as scheduled, at least at this month,” he said.

The announcement of the debt exchange programme by the Finance Minister Ken Ofori-Atta has suffered rejection from Ghanaians.

For instance, Convener of the Individual Bondholders Forum (IBF) Senyo Hosi, said regarding the programme that in an unfortunate oppressive fashion, the government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders.

In the process, the IBF said, Ghanaians have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable.

This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission,” a statement issued by Hosi said.

The Government of Ghana (GoG) announced that under its Domestic Debt Exchange (DDE) programme, individual bondholders were to submit to a “voluntary” arrangement to exchange their domestic bonds for new benchmark bonds.

This arrangement, according to IBF, irreversibly takes away the wealth and livelihoods of direct and indirect individual bondholders whose only crime has been to trust their government.

Tied to this is a mandatory deadline which compels holders to either accept the government’s offer or risk the threat of prohibitive losses, the Forum added.

It stressed “In an unfortunate oppressive fashion, government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders. In the process, we have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable.  This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission.” 

The Individual Bondholders’ Forum (IBF) is a voluntary group of individual bondholders established with defined governance structures to coordinate and defend the interests of individual bondholders in respect of the DDE program and to engage the GoG.

By Laud Nartey/3news.com


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