Kofi Ahovi

  Ghana's government and international bondholders are pushing forward with formal debt talks after advisors to both sides signed non-disclosure agreements (NDA), three sources with direct knowledge of the matter told Reuters today. According to the report monitored by Graphic Online, the government which suspended payments on most of its external debt last year, has picked Lazard as its financial adviser, while a group of international private lenders are represented by Rothschild & Co. The report said Ghana's dollar-denominated debt is more than $13 billion across maturities ranging from 2023 to 2061, according to Refinitiv data. Reuters also noted that after signing the NDAs earlier this month, both parties cannot share any information under the agreement with any non-authorised party. The government and the bondholders are sharing sensitive material through the advisers, like the revenues that could be used to service the debt and the restructuring parameters the credit...

  The Ghana Union of Traders Association (GUTA) and the Association of Ghana Industry (AGI) are calling on regulators of the financial sector to do more to protect the investments of Ghanaians. The two associations are of the view that if confidence and trust would return to the capital market, the Bank of Ghana and the Securities and Exchange Commission (SEC) must do more in terms of regulation. Speaking in an interview on the sidelines of the Graphic Business/ Stanbic Bank Breakfast meeting, the President of the GUTA, Mr Joseph Obeng, said the regulators must build a strong capital market that would be attractive to traders. The breakfast meeting, which was held on the theme “Domestic Debt Exchange Programme; Lessons and Implications for How to Invest”, brought together policy makers, regulators, experts and people in academia. All that we need is confidence in the system. We are importers and are in the informal sector but at the same time, we have to diversify our business and ...

 China’s Finance Minister, Liu Kun, says his country has confidence in the management of the Ghanaian economy, and that his country would help Ghana seek debt servicing relief. At a meeting in Beijing with Ghana’s Finance Minister, Ken Ofori-Atta, last week, Kun said the Chinese authorities “have confidence in Ghana’s economic management and its long term economic viability.” Kun said he wanted to ensure that Ghana’s external debt treatment request was considered expeditiously and was thus accompanied to the meeting with Mr. Ofori-Atta by a high-level delegation including Mr. Wu Fuli, Chairman of China Exim-Bank. Minister Kun said “we know that these are short-term challenges which we as responsible creditors, remain committed to resolving”. The long-standing and prosperous relationship between Ghana and China imposes on us a responsibility to help,” the Chinese Finance Minister added. He said that just like other African countries, Ghana was facing economic difficulties from a onc...

Finance Minister Ken Ofori Atta has left Accra for China to have negotiations on debt restructuring with officials of that country.  Sources say the Minister left over the weekend via Addis Ababa where he is attending the UNECA High-Level Ministers meeting on Global Financial Architecture. After that meeting, Ofori-Atta is expected to head to China, possibly on March 22, 2023. The Minister who is leading the government delegation is expected to continue bilateral talks with China as well as seek financial assurances for Ghana’s programme with the International Monetary Fund.  The trip was postponed to the end of March because it coincided with the National People’s Congress of China meeting in early March 2023.  The Minister of Finance has already held meetings with officials of Exim Bank China in Ghana, all in the line of re-profiling the country’s debt to China. Ken Ofori Atta on China visit Finance Minister, Ken Ofori-Atta, in an earlier meeting with the German Finance...

  The Minister of Finance, Ken Ofori-Atta, will present a policy brief on the domestic debt exchange programme (DDEP) to Parliament on Thursday, February 16, 2023. The briefing is pursuant to the Speaker’s directive to the Business Committee last Tuesday to programme the minister to appear and brief members of the House on the DDEP. The Deputy Majority Leader, Alexander Afenyo-Markin, who made this known to Parliament today said the leadership of the House had engaged him. The minister, in his response, indicated that he had committed to an earlier engagement on behalf of the government on the said Tuesday,” he told the House. Afenyo-Markin disclosed this when he presented the business statement for the next week ending Friday, February 17, 2023 The minister was initially to have been scheduled by the Business Committee to appear before the House on Tuesday, February 14, 2023. Directive. The Speaker of Parliament, Alban Sumana Kingsford Bagbin, last Tuesday directed the Business Co...

  The Individual Bondholders Forum (IBF) has proposed some fiscal measures it say can help government save ¢83.5 billion, insisting the Ministry of Finance must not touch their funds. According to the group, government can save ¢20 billion from privatizing selected State Owned Enterprises to Tier-2 pension funds to drive efficiency and productivity. The measures proposed, per the estimation of the IBF yield net savings of ¢83.5 billion. The IBF holds the position that the recommendations are competent enough to urgently address the fiscal challenges and enable us to reach the desired 55% debt-to-GDP target proposed to the IMF”, a statement signed by Senyo Hosi, Convener of the IBF, and Samuel Arkhurst, Director at the Ministry of Finance said. The statement was issued by the Government of Ghana-Individual Bondholders’ Forum Technical Committee on the Exclusion of Individual Bondholders from the Domestic Debt Exchange Programme. Providing some more recommendations, the IBF said that...

 The government and the insurance industry have fundamentally reached a deal on the terms of participation of insurance companies in the Domestic Debt Exchange Programme (DDEP). On similar lines as the agreement with the banks late last week, the GraphicOnilne has picked information from sources that the new agreement with the insurance industry encompasses final improvements to the terms of the programme. The banks agreed to terms including; an agreement to pay five per cent coupon for 2023 and a single coupon rate for each of the twelve new bonds resulting in an effective coupon rate of nine per cent, clarity on the operational framework and terms of access to the Ghana Financial Stability Fund (GFSF) and the removal or amendment of all clauses in the Exchange Memorandum that empowers the Republic to, at its sole discretion, vary the terms of the Exchange. The sources did not give further details but the GraphicOnline can confirm that the agreement, albeit, reluctantly agreed by ...

  The Association of Rural Banks says members have invested in government bonds and if they are not exempted from the Domestic Debt Exchange Programme, it could hit them hard. The association has therefore written to the Finance Minister, Ken Ofori-Atta requesting that rural banks be exempted from the debt exchange programme.   Rural banks have almost 40 percent of their total assets in government bonds amounting to GH¢753 million and this is considered very significant. Any haircut or unilateral rescheduling of coupon payments would, therefore, significantly affect the operations of rural banks, they noted in the letter sighted by Graphic Business.   It will mostly affect liquidity and solvency position especially when these banks are already reeling under the current precarious economic situation facing the country,” the letter stated.   “The RCBs still have a significant proportion of their funds amounting to GH¢460 million locked up with vario...

Finance Minister, Ken Ofori-Atta has assured that government will not touch Treasury Bills (T-bills) under the Domestic Debt Exchange Programme.  According to him, it will be suicidal for government’s own finances and fundraising programmes in the future to touch T-bills as part of the programme. Mr. Ofori-Atta noted that government has conducted a Debt Sustainability Analysis which does not include T-bills. We can’t afford to touch it. Let me assure you, Treasury bills will forever remain sacrosanct. Treasury bills are exempted completely. We have done the sustainability analysis. We are not including treasury bills. That is how government funds its operations”, he reaffirmed. He disclosed this on PM Express Business Edition which will be aired on Joy News at 9pm January 19, 2023 with host, George Wiafe. Treasury Bills Support Government has heavily relied on T-bills to fund its operations after it announced in December 2022, that it will embark on Domestic Debt Exchange Programme...

The deadline for individual bondholders to assent to the governments invitation to the Domestic Debt Exchange Programme(DDEP) has been extended to January 31, 2023. The extension is to help deepen stakeholder engagement on the proposed policy. In a tweet by the Office of Finance Minister on Monday, it was explained that there is the need for government to rally consensus towards a successful implementation of the programme, hence the extension of the deadline to the end of the month. “Building consensus is key to a successful economic recovery for Ghana. Pending further stakeholder engagement with institutional and individual investors, recently invited to join the debt exchange programme, government is extending the expiration of the DDE to Jan 31, 2023”, the tweet said.   more to follow...

  The Minority in Parliament has registered dissatisfaction with the government's Debt Exchange Programme. According to the Minority, it threatening the very survival of "our financial sector." "Today, Ghana is rated alongside Sri Lanka and Lebanon, what an irony! a reflection of the horrendous mismanagement of the economy. It is no secret that Ghana today is in debt Distress. This has been confirmed by both the finance minister and the International Monetary Fund (IMF)," the Minority Leader, Haruna Iddrisu stated. Attached below is a copy of the full address .          

  An Economist and Professor of Finance at the University of Ghana, Legon, Professor Godfred Bokpin has said the government must engage and build a consensus with stakeholders in the financial sector to ensure a smooth operation of the debt exchange programme. Such engagement, he said would help iron out all lingering issues, especially with regard to individual bondholders, which would help the government in its quest to streamline its balance sheet to meet the International Monetary Fund (IMF) bailout. He said the debt exchange programme in its current form would systematically weaken the balance sheet of the participating financial institutions. And this is Ghana, a country where it is projected that by 2040, as the forecast has been made, our population will be 45 million and 58 per cent of that population will be less than 30 years and the prediction is that Ghana needs to create 10 million jobs from now to 2040 in the formal wage economy,” he told a radio station monitored by...

Four Ghanaian banks are feared to be highly exposed as government pursue an aggressive debt exchange programme to balance off its books and secure a US$3 billion bailout from the International Monetary Fund (IMF). The banks, three indigenous and one multinational, have overly been overstretched due to their over exposure to government debt securities as a major source of “safe investments”. Banking sector analysts have revealed that although all the 23 banks in the country are exposed due to the ongoing debt exchange programme, the four banks, however, are in distressed state. According to C-Nergy Ghana, an investment advisory firm, the four banks had an average of 54 per cent share of their assets specifically invested in bonds, thereby exposing them badly. The banking sector is the most dominant investor in Government of Ghana (GoG) debt instruments, a phenomenon induced by both regulatory and market economics. In 2017, only GH¢10 billion worth of GoG issued debt securities was held ...

 The Ministry of Finance has restated that eligible bondholders who refuse to participate in government’s debt exchange programme will not benefit from the new arrangement outlined by government in case there is default in payment. Government, is seeking an International Monetary Fund Programme that requires a debt restructuring before a deal could be reached with the Bretton woods institution. Bondholders have until January 17, 2023 to accept the new arrangement which include some suspension of interest payment. For those not participating in the domestic debt exchange, they will continue to hold the non-tendered eligible bonds – the “old” bonds. However, the Government reserves the right to ensure that “old” bonds do not benefit from their non-participation in the domestic debt exchange, including through additional regulatory measures”, the Ministry, in a Frequently Asked Questions (FAQs) statement said. The statement assured that once the domestic debt exchange is successfully ...

  The Chamber of Corporate Trustees (Pensions Chamber) has urged all Board of Trustees and Employer Sponsored Schemes not to engage government in the debt exchange programme in its current format until it has renegotiated a favourable term for the pensions industry. According to a letter dated December 15, 2022, it said, since the announcement of the domestic exchange programme, the Chamber of Corporate Trustees on behalf of the pensions industry has been advocating for the pensions industry to be ring-fenced or the terms renegotiated. As at today, 15 th  December 2022, the Pensions Chamber has written to the Minister of Finance to extend the deadline of the Domestic Exchange programme by one month to allow for the renegotiation of the debt by the domestic bondholder committee”. “We would therefore advise your schemes not to engage in the debt exchange in the current format until we have renegotiated a favourable term for the pensions industry”, it explained. As you are aware,...

The Financial Stability Council (FSC) has announced that it has begun a process to establish a fund that will provide liquidity to financial institutions that participate fully in Ghana's Domestic Debt Exchange programme. Known as the Ghana Financial Stability Fund (GFSF), the fund is being established with a target size of  GH ₵15 billion to be provided by the government and its development partners. The FSC in a statement issued today said all financial institutions (banks, SDIs, pension schemes, collective investment schemes, fund managers, broker/dealers, insurance firms) that fully participate in the Debt Exchange can access the GFSF for augmented liquidity support, with effect from the date of completion of the Debt Exchange programme. The Fund will be managed by the Bank of Ghana under unique operational guidelines being developed by the Financial Stability Council. The Financial Stability Council will provide ongoing advice and oversight for the use of the GFSF," the s...

The Chamber of Corporate Trustees has rejected the debt exchange programme proposed by the Ministry of Finance. According to the chamber, the proposal put forth by the Minister of Finance, Ken Ofori-Atta, is inferior to market expectation and will destroy the savings of Ghanaians and further undermine market confidence. We have carefully analysed the announcement by the Minister of Finance on the Debt Exchange Programme and are of the opinion that it is injurious to the interest of contributors to pension schemes”, it said in a statement. “The proposal as put forth by the Minister of Finance is inferior to market expectation and will destroy the savings of Ghanaians and further undermine market confidence. This is why we reject it outright”, it explained. It assured contributors to pension schemes that the industry has not agreed to the debt exchange programme proposed by the Ministry of Finance. As Trustees, we hold a fiduciary responsibility and are enjoined to seek the best interest...

  Auditing and accounting firm, PwC, is upbeat the Investor Protection Fund outlined in the 2023 Budget would restore investor confidence which it describes as low due to the various rating downgrades and the recent decline in investment valuations. It is however warning that the proposed debt exchange programme is likely to further spur the rate of client investment withdrawals. This is coming after the capital market has in recent past recorded significant withdrawals of clients’ investments, following speculations about the government’s debt restructuring programme. However, the government intends to propose an amendment to the Securities Industry Act, 2016 (Act 929) which provides a legal framework for the establishment of the Investor Protection Fund. In its review of the 2023 Budget, PwC, said an Investor Protection Fund may ensure that investors are compensated in the event of a defaulting debt holders’ asset not being sufficient to meet investors’ admitted claims. In our vi...

  A ranking member on the Finance Committee of Parliament says the country’s creditworthiness will hit a further snag over the government’s proposed debt exchange programme.  Dr Cassiel Ato Forson said rating agencies will soon downgrade the country to further junk status.  The Ajumako Enyam Essiam MP thus asked Ghanaians to brace themselves up for more hardships.  He subsequently expressed sympathies with investors in the country.  Ghana has unfortunately announced a domestic DEBT DEFAULT. Expect rating agencies to downgrade Ghana to D tomorrow! “Sad day for Ghanaians, the investor community and Banks!” Finance Minister, Ken Ofori-Atta on Sunday, December 4, announced the government’s domestic debt exchange programme. These measures include some exemptions and external debt restructuring parameters that will be implemented. Per his release, treasury bills and individual bondholders will not be affected by this exercise. However, domestic bondholders will be com...

The Minister of Finance, Ken Ofori Atta, has admitted that the launched Debt Exchange Programme is part of a key requirement for the government to get an economic deal from the International Monetary Fund. According to him, the government has no choice but to undertake the debt restructuring programme to put the debt level on a sustainable path. 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. Addressing Journalists to launch the domestic debt operations, he, assured the financial sector players of government’s support to minimise the impact of the programme on their activities. The Minister hinted that the Governor of the Bank of Ghana, Dr. Ernest Addison, and other heads of ...