What is debt restructuring: Debt exchange programme in Ghana
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Debt Exchange Programme (DEP) in Ghana is a framework of the Akufo-Addo-led government under the finance watch of Ken Ofori-Atta meant to help the government in clearing its debt.
The debt exchange programme was brought in to assist the country to restructure its debt using levels that they perceived to be sustainable.
Under the Programme announced by Ken Ofori-Atta, the Finance Minister in December 2022, he said “domestic bondholders will be asked to exchange their instruments for new ones. Existing domestic bonds as of 1st December, 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032, and 2037.”
Additionally, he said “The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity. Coupon payment will be semi-annual.”
Further, he stated categorically that, his government has been working assiduously to reduce the great impact of the domestic debt exchange.
“The Government of Ghana has been working hard to minimize the impact of the domestic debt exchange on investors holding government bonds, particularly small investors, individuals, and other vulnerable groups.
Based on bringing freedom, the following 3 are exempted:
1. Treasury Bills are completely exempted and all holders will be paid the full value of their investments on maturity.
2. There will be NO haircut on the principal of bonds.
3. Individual holders of bonds will not be affected.
SOURCE: Coverghana.com.gh
