Ghana’s Finance Minister, Ken Ofori-Atta, has admitted that the Debt Exchange Programme, launched on Monday, is a key requirement for the government to get an economic deal from the International Monetary Fund (IMF).
He pointed out that the exchange programme was a necessary evil at a time where the country’s debt is unsustainable.
“This is a key requirement to allow Ghana’s economy to recover as fast as possible from this crisis. This is also a key requirement to secure an IMF support,” he told journalists in Acccra.
Mr. Ofori-Atta maintained that the debt exchange will help in restoring Ghana’s capacity to service its debt.
“This is the path towards resetting the economy to a more stable one capable of addressing the development challenges of the country.
He further stated that as part of a “more comprehensive agenda” to restore debt and financial sustainability, government is working towards a restructuring of the country’s external indebtedness.
An IMF mission team is presently in the country to continue discussions with the authorities on the country’s post-COVID programme for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement.
The Finance Minister however reiterated that no individual bondholder will lose their funds in the proposed programme.
“In particular, it does not embed any principal haircut on Eligible Bonds, as we promised. Let me repeat this fact as plainly as I can, in this debt exchange individual holders of domestic bonds are not affected and will not lose the face value of their investments.
“So let us remove any doubt and discard any speculation that the Government is about to cut your retirement savings or the notional value of your investments. That is not the case.
“As already announced, Treasury Bills are completely exempted, and all holders will be paid the full value of their investments on maturity. There will be NO haircut on the principal of bonds. Individuals who hold bonds will also not be affected at all.”