Senyo Hosi, a businessman, has accused the Akufo-Addo administration of pushing a significant portion of Ghana's financial liabilities to future governments through the new Domestic Debt Exchange Programme (DDEP), which has been presented to labour.
Speaking on TV3's “Business Focus” with Paa Kwasi Asare on Monday, April 17, Hosi claimed that “You actually have a government now who is deferring a lot of liabilities on pensions to a later time, to a future government.”
According to reports, government is proposing an “Alternative Offer for Pension Funds,” which Organised Labour believes is a new debt exchange programme. Organised Labour has warned that the agreement reached in December, which stated that workers' pensions would not be included in any such programme, still stands.
The Ministry of Finance has allegedly written to the Board of Trustees of Pension Funds requesting their participation in the new programme. According to sector Minister Ken Ofori-Atta, the proposal has been “crafted to facilitate the execution of the MoU, addressing the Government financial needs while maintaining the value of the pension funds.”
Ofori-Atta stated that the proposal entails exchanging “your current holdings of Treasury Bonds, ESLA bonds and Daakye Bonds for a menu of the currently outstanding New Bonds (issued in February 2023 and maturing in 2027 and 2028 respectively. New Bond 2027 and New Bond 2028 featuring an average coupon of 8.4% with a ratio of 1.15x, thus entailing an increase in patrimonial value.”
He went on to say that “This is complemented by an additional cash payment of 10% (strip coupon). The stream of coupons to be received as part of this proposal will therefore be 21% compared to the current 18.5% of the outstanding old bonds.”
Ofori-Atta further clarified that “in 2023 and 2024, both instruments will pay 5% coupon in cash, and the remainder will be capitalized into the nominal amount of the two bonds in order to comply with the cash constraints and the macro-framework defined under the programme with International Monetary Fund (IMF).”