Government won’t review debt exchange programme now, says John Kumah

A deputy finance minister, John Kumah, has said the government will not review its position on the Debt Exchange Programme despite agitation by trade unions.

Finance Minister Ken Ofori-Atta on Monday (5 December) launched the debt exchange programme in line with the government’s quest to restructure debt and put the economy back on track.

“This debt exchange provides an orderly way to put our economy back on track,” Ofori-Atta said during the launch.

However, the Trades Union Congress (TUC), which has large investments in treasury bills through TUC pension funds, has warned the government not to touch pension funds belonging to its members.

Speaking on the Big Bulletin with ith Beatrice Adu on Wednesday (14 December), Kumah said Ghana needs the debt exchange programme to fend off an economic crash.

“It’s a very difficult situation but the institutions must understand that for their bonds and interests to do well, we need a strong macroeconomic environment.”

“And this is a temporary situation we need to go through in order to revive it [economy]. So, unfortunately, it’s the price we all have to pay to get an effective and strong bond market for the moment …” Kumah said.

The deputy finance minister, however, assured the government has already engaged direct bondholders and will also engage in direct bondholders on the programme.

“The institutions that are at the moment agitating are not direct bondholders, the unions and associations claim that they have traced their pensions through the pension fund, It’s not the pension funds [managers] themselves who are complaining. So we have done extensive engagement for direct bondholders but we will continue engagement with indirect bondholders who fear for their investments,” he said.

Kumah added, “… government has set up a financial stability fund which will continue to provide financial support to institutions that may have the need for it including the pension funds.”