Government extends Domestic Debt Exchange deadline for 3rd time

Ken Ofori-Atta, Finance Minister

The government has for the third time, extended the Debt Exchange Programme to Tuesday, January 31, 2023.

The extension is to allow government to build a consensus while they engage with stakeholders, institutions and individual investors.

In a Twitter post with the Ministry of Finance, it stated

” Building a consensus is key to a successful economic recovery for Ghana. Pending further engagement with institutional and individual investors, recently invited to join the debt exchange programme, the government is extending the expiration of the DDE to January 31, 2023.

Meanwhile, the Minority has asked the government to suspend the debt restructuring as it will kill the banking sector and Ghanaians.

The minority urged government to engage in more comprehensive consultation on the matter with all stakeholders and Ghanaians.

Last year, the government, through the Ministry of Finance, announced a debt exchange programme, dubbed the Domestic Debt Exchange (DDE) programme.

What the government is seeking to do with its debt exchange programme, the DDE, is to amend the interest it promised the Ghanaian who loaned it money (the bondholder) and the duration for which the lender is supposed to get his interest and principal back.

In other words, the government is swapping the agreement (the time and the promised interest) it had with the bondholder with a new one (new interest (s) and/or new duration(s)), hence the name, debt exchange.

For example, if you held a government bond as of December 1, 2022, which was supposed to mature in 2025, the government is now promising you four new bonds (agreements) which are expected to mature in 2027, 2029, 2029, 2032 and 2037. And you are expected to earn 0% interest in 2023, 5% interest in 2024, and 10% in 2025, which will continue till the maturity of your bond (when you are expected to get your investment with the promised interest).

Many have kicked against it and have vowed to head to court should government insists on including individual bond holders.

NYA/WA