Debt restructuring: Interest can be deferred while principals are paid - Analyst

A Financial Analyst, Professor Williams Peprah, has stated that the government should not conduct debt restructuring in a way that discourages investors from investing.

According to him, interest payments can be postponed whiles principals are paid under the possible programme.

Earlier, reports have revealed that some domestic investors were losing their investments due to an order from the Securities and Exchange Commission to banks.

The supposed order was for banks to use the mark-to-market approach to pay investors.

The investors have since lamented the inconveniences that this has caused while adding that some have begun losing part of their principal.

However, Prof. Peprah advised the government to restructure debt in a way that gives room for people to be able to access their principal when they want due to rising inflation in the country.

He said: “For the bonds, loss of confidence in the Ghanaian economy, it is better to defer interest payments and then pay principals so that people will be able to get cash flow to survive.”

“The reason why we’re seeing a lot of people trying to dump or discount their bonds now is because they need cash to survive because of the high inflation. So, government will have to have a metric where a certain class of investors is allowed to receive some funds to survive.

“I give an example; if I’m a pensioner, normally when they’re doing the bonds, they collect some data…so all those things are in the database. So, they must come out with some classification of individuals or age group brackets that will be allowed to withdraw some funds immediately,” he is quoted by myjoyonline.com.


“For those who are within their youthful age, between 20 and 35 in terms of years, they have time, can we have a discussion to prolong the payment of their principal and a little portion of their interest to them for them to survive. To pay a zero coupon it’s going to have a major impact on the Ghanaian economy. So, on the bond market we have to use the age bracket in order to be able to consider some issues,” he said.


SSD/MA