Govt targets pension funds in renewed debt exchange



The Minister of Finance, Ken Ofori-Atta, who made this known while presenting the mid-year budget review in Parliament today stated that the DDEP had provided the government with increased fiscal flexibility and addressed cash and other liquidity constraints.

However, he said to complete the domestic debt operations, the government intends to further pursue discussions around some other domestic debt instruments which excluded from the DDEP perimeter.

“Mr Speaker, although pension funds were exempted from the main DDEP, we continue to engage them,” Mr Ofori-Atta said.

Of the remaining debt instruments, the government launched debt operations for the cocoa bills and local US dollar-denominated bonds on July 14, 2023 with a settlement date of July 31, 2023.

He said the government was also engaging with the Independent Power Producers (IPPs) on debt relief and financing arrangements to achieve both debt sustainability for the country and financial sustainability for the energy sector.


On December 5, 2022, the government launched the DDEP in a transparent manner while seeking to minimise its impact on bondholders.

After three months of negotiations with the different bondholder groups and amendments to the original terms, the government successfully completed the DDEP on February 14, 2023.

Total bonds outstanding at the settlement date amounted to GH¢126.98 billion, of which GH¢29.29 billion were held by pension funds, bringing the total eligible bonds to GH¢97,75 billion.

The Ministry of Finance (MoF) received final participation of GH¢82.99 billion, representing 84.9 per cent of total eligible bonds.


The finance minister noted that as part of the restructuring process for external debt, the government requested the treatment of the bilateral debt under the G20 Common Framework beyond the debt service suspension initiative.

He said the government also held a series of engagements with its bilateral creditors via the Paris Club to provide financing assurances to support Ghana’s IMF-ECF request.

He explained that the official creditor committee for bilateral creditors was established and cochaired by China and France.

He said the committee provided financing assurances on May 12, 2023, to support the IMF’s Board approval of Ghana’s IMF-ECF request on May 17, 2023.


Mr Ofori-Atta stated that the government had also begun the process of negotiating with its commercial creditors, that is the country’s Eurobond investors.

Within the period, he said two bondholder groups had been formed, comprising domestic and regional bondholders as well as international bondholders.

“The government has already shared a set of data and scenarios to commence discussions.

“On the restructuring of Eurobonds, we expect to receive counteroffers from the bondholders in the short-term and envisages an agreement by year end,” he said.

Debt restructuring

The minister noted that the financial sector, comprising commercial banks, specialised deposit taking institutions, insurance sector, and fund managers, participated significantly in the DDEP.

He said the effects of the debt operations on the financial sector was elevated liquidity and solvency risks from impairment losses, while regulators, including the Bank of Ghana, provided temporary regulatory forbearance to mitigate the liquidity impact of the DDEP.
Importantly, he said the government was working with key partners to establish a Ghana Financial Stability Fund to provide liquidity and solvency support to the financial institutions.

The eligibility criteria agreed with regulators and international partners is expected be published soon, the minister said.

He said these macro-prudential interventions and operations were also expected to help address the impact of the large external shocks within a wider global economic context.

Meanwhile, Mr Ofori-Atta noted that the government was mindful of the impact of the debt exchange programme on individuals and would be working hard to stabilise the economy towards a faster economic recovery to ameliorate impact on the welfare of the individuals.


However, labour unions are adamant, saying they still stand by their earlier decision to the government to exempt pension funds from the DDEP.

The Secretary-General of the Trades Union Congress (TUC), Dr Yaw Baah, said the new proposal from the government to the Board of Trustees of Pension Funds to participate in a new alternative offer had not been accepted by the labour front.

While the labour front has urged the Trustees of the Pension Funds not to further engage the government on its new proposal, Dr Baah said there were still deliberations among the various labour unions on the proposal.

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