Chief Operations Officer at Dalex Finance, Mr Joe Jackson fears that the rollout of the new domestic debt exchange programme (DDEP) for US Dollar-denominated bonds to cover an estimated $809 million by the Finance Ministry and the Ghana Cocoa Board’s voluntary debt securities exchange programme, will be wiping our the achievements of the domestic debt exchange programme that was earlier undertaken.
He told TV3 in an interview that “Is this not wiping away everything we have achieved in the debt exchange programme? Everything we are trying to achieve with the dollar-denominated bonds, everything we are trying to achieve with the cocoa bond exchange programs, this is crazy. In a country where it is clear that the government agenda is to reduce its coupon rates on its debt service to as low as 12, 13 percent.”
The new programme comes after a successful roll-out of the Cedi-denominated bonds in December 2022.
A statement issued by the Ministry on Friday, July 14 said the “successful completion of this programme will allow our country to restore sound public finance and sustainable debt levels and kickstart economic growth following the impact of the Covid-19 pandemic and the global economic shock created by the war in Ukraine”.
This invitation, according to the Ministry, is an arrangement through which holders of eligible bonds will submit their holdings governed by law and denominated in US Dollars for new benchmark bonds, also denominated in Dollars but “with the same aggregate principal amount”.
It will also have in the aggregate a lower average coupon and extended average maturity than the eligible bonds.
The Ministry stressed that this new programme is a critical component of both the debt reduction programme and the programme discussions with the International Monetary Fund (IMF).
“It will contribute to unlocking the support of the international community and will allow Ghana to achieve its debt targets,” the statement said.
The Ghana Cocoa Board (COCOBOD) has also launched a voluntary debt securities exchange programme, available between 2024 and 2028, for holders of short-term Cocoa Bills.
Announcing this in a statement dated Friday, July 14, COCOBOD said offers can be submitted immediately up till Monday, July 31, subject to extension.
Holders of Cocoa Bills whose offers are accepted will receive five different bonds with an aggregate principal amount equal to the principal amount of Cocoa Bills tendered, the statement said.
It added that the five bonds will mature on a one-per-year basis consecutively from, and including, 2024 to, and including, 2028.
The statement noted that the reasons for undertaking the programme have already been spelt out to holders by the Chief Executive Officer, Joseph Boahen Aidoo.
“An offer, once made, cannot be revoked or withdrawn at any time except in the limited circumstances described in the Exchange Memorandum.”