The Minister for Finance, Ken Ofori-Atta, has described the remarkable progress with the on-going International Monetary Fund (IMF) Programme as a significant boost to our economic recovery efforts.
According to him, the continuous progress will steer Ghana away from the slippery cliff the country recently faced.
In an address to update the nation on the progress of the Domestic Debt Exchange Programme (DDEP), Ofori-Atta said the momentum has to be sustained.
Consider the merit of the enhanced DDEP
The Finance Minister explained that considering the importance of a sustained economic recovery, backed by an approved IMF programme in the first quarter 2023, it is crucial for groups and individuals to consider the merit of the enhanced DDEP, as well as the need for economic stability and sign up by today to make it a successful one.
He cautioned that non-participation or a lower-than-expected turnout for the Domestic Debt Exchange Programme (DDEP) will prolong efforts to resolve the current economic crisis and thereby jeopardising prospects of international financial support.
Ofori-Atta said such a situation could further put strain and stress on the Government’s capacity to honour key commitments, adding “this is not what we want for our economy.
“What we want is an economy that is back on track, stable, vibrant, productive and dynamic; meeting the needs of individuals, households and enterprises; delivering shared and inclusive growth and improving incomes and livelihoods.
“These are difficult times, no doubt, but if we hold on together, we can and we will emerge from this more resilient and more united than before.
“Then we shall, together, continue rebuilding our economy again; and enable businesses to thrive again; and bring back hope and cheer to our homes again,” he stressed.
Restoring macro-economic stability
The Finance Minister also explained that the singular motivation for taking this rather difficult road is to restore macro-economic stability, achieve debt sustainability and get the economy fully back on track.
He pointed out that these are necessary pre-conditions for creating jobs, safeguarding and enhancing incomes, fostering inclusive growth and restoring hope to Ghanaians.
Ofori-Atta is confident that through collective hard work and discipline, coupled with the abiding and abundant grace of the Almighty God, government remained focused on avoiding a full-blown economic crisis.
Under the improved offer, all individual bondholders who are below the age of 59 years (Category A) are being offered instruments with a maximum maturity of 5 years, instead of 15 years and a 10% coupon rate.
All retirees (including those retiring in 2023; Category A) are being offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 15% coupon rate.
Ofori-Atta said the objective of this is to ensure that individuals, especially retirees, who put their hard earned savings in the domestic market, are not left in hardship as a result of the DDEP and yet contribute to the resolution of the current crisis.
He said government was intentional in pushing the threshold of what is possible, in order to safeguard the well-being of our pensioners, preserve the savings of individuals, protect the working capital of businesses, ensure the health and stability of our financial sector and restore macroeconomic stability.
Significant amendments made
Significant amendments have enabled government to reach an agreement with key major domestic creditor categories including banks, insurance companies, capital market players and foreign holders of domestic debt in relation to their participation in the DDEP.
All of the institutional bondholders will be paid a 5% coupon on its 2023 bonds.
All other restructured bonds will pay 9% coupons, rather than the variable rates originally outlined.
Under the agreement, the government has removed all clauses in the Exchange Memorandum that empower the government to, at its sole discretion, vary the terms of the Exchange.
The Finance Minister described the participation of the banks, insurance companies and the securities industry; under the enhanced DDEP as a significant milestone which represents a response to a call to national duty
He encourages eligible Individual Bond Holders to voluntarily tender their holdings, adding that government expects the full participation of institutional stakeholders and mobilisation of all qualified investors, to ensure the success of the debt exchange operation;
Ofori-Atta assured that government is resolved to continue to undertake all necessary fiscal adjustments that would ensure that our sacrifices will pay-off and the collective good is upheld.
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