25 major highlights from Ofori-Atta’s speech on DDEP

The Finance Minister, Ken Ofori-Attah was in Parliament, Thursday, February 16, 2023, to present a statement on the country’s Domestic Debt Exchange Programme (DDEP).

In his address, he clarified those who were exempted from the Programme including pensioners.

The Finance Minister said all pensioners who failed to tender their old bonds for new ones under the exercise have been exempted from the programme.

GhanaWeb brings you some of the highlights of his address:

Ghana’s Debt Restructuring Programme

• As of 14th February 2023, approximately 85% of bonds were tendered in the Exchange (as determined by the Central Securities Depository).

• The Ministry of Finance formally launched the Domestic Debt Exchange (DDE) on 5th December 2022 seeking to restructure about Gh¢137 billion worth of Government bonds and notes.

• As of December 2022, the total outstanding debt (Eligible and non-Eligible Holders) amounted to approximately Gh¢137 billion.

Domestic Debt Exchange Programme

• Participation in the programme has always been “Voluntary”.

• Since the first announcement of the DDE Programme on 5th December 2022, the Government has continued to engage with multiple stakeholders on the programme.

• The final terms of the DDEP are as follows:

a. Category A- Collective Investment Schemes and Natural Persons below the age of 59;

b. Category B- Natural persons 59 years old or older; and
c. General Category Holders- representing all other holders except Category A and B.

• Government is developing several prudential measures to mitigate the potential impact on domestic creditors.

• Government is working together with the Bank of Ghana, the Securities & Exchange Commission, the National Insurance Commission, and the National Pensions Regulatory Authority are recalibrating their regulatory tools.

• A Financial Stability Fund (FSF) is being established by Government with the help of development partners to provide liquidity and solvency support to banks, pension funds, insurance companies, fund managers, and collective investment schemes to ensure that they are able to meet their obligations to their clients.

• Government will honour their coupon payments and maturing principals, like all Government bonds, in line with Government’s Fiscal commitments.

What government is doing about the inclusion of pensioners:

Government remains committed to the well-being and dignity of our Senior Citizens and Pensioners. Indeed, it has personally caused me great distress as a number of them have picketed at the premises of the Ministry of Finance since Monday, 6th February 2023.

Government will honour their coupon payments and maturing principals, like all Government bonds, in line with Government’s Fiscal commitments.

In seeking to understand the concerns of our Senior Citizens, I have met with them on three occasions. The most recent was yesterday 15th February 2022, where I explained the terms of the new bonds.

All pensioners who did not participate in the exchange are exempted and therefore there will be no need for our Senior Citizens to picket at the Finance Ministry.

External Debt Operations

• Ghana has officially asked its bilateral creditors for a Debt Treatment initiative under the G-20 Common framework.

• The Ministry of Finance has started the process of negotiating in good faith with our commercial creditors. Two preliminary discussions and exchange of information have started on a good footing with representative committees and advisors.

• Government and the Ministry of Finance are also approaching major creditors like China and India to ensure that our discussions with the Paris Club is accelerated.

• The Ministry of Finance has initiated discussions with the representatives of our international bondholders and their Advisors. Substantive discussions are due to start with them in the weeks to come.
Post Debt Operations

• Government will continue to secure an IMF programme to boost confidence in the economy, as it enhances the country’s domestic mobilisation efforts.

• Government sought financing from the Bank of Ghana to augment its fiscal operations for the year.


• Last week, Bank of Ghana concluded work on its financial accounts for 2022 and reports that the total overdraft extended to Government for 2022 was GHC 37,956.82 million.

• There’s the need for Parliament to pass the Income Tax (Amendment) Bill, Excise Duty & Excise Tax Stamp (Amendment) Bills, and the Growth and Sustainability Levy Bill.

• The need to secure the Board Approval for our IMF Programme by the end of March 2023.

Conclusion

• The Ministry of Finance is relying on the Treasury Bills and concessional loans as the primary sources of financing for the 2023 fiscal year.

• Finance Minister will return to Parliament in august with the necessary fiscal adjustments after the debt operation is completed for consideration and approval.

PI/WA