Debt exchange plan will boost confidence in Ghana’s economy – Addison

The Governor of the Bank of Ghana, Dr Ernest Addison, has expressed optimism that the proposed Debt Exchange Programme announced by the government will bring some confidence in the economy as well as enhance the efforts of the Central Bank in controlling inflation.

He noted that the economic challenges which have affected many banks have led to the high cost of borrowing and doing business.

Speaking at the Annual Dinner of the Chartered Institute of Bankers, Ghana, Dr Addison assured of the Central Bank’s support to financial institutions to provide them with additional liquidity during the exercise.

“In addition to the near-term adoption of the IMF programme, we will provide a balance of payment support to help with financing gaps, boost investor confidence and restore stability.”

The Government on Sunday announced a slash in interest payments for domestic bondholders to zero percent in 2023 and pegged 2024 interest payments at 5 percent.

The government, however, said there will be no haircut on the principal of bonds, adding that individuals with government bonds will have their full investments upon maturity.

In a public address on Sunday, December 4, on the current economic situation, the Finance Minister, Ken Ofori-Atta said the government will ensure that people’s investments are safe. He further announced that interest payments for domestic bondholders for 2024, will be pegged at only 5% adding that from 2025, the rate increases to 10%

Meanwhile, the Finance Minister has admonished the media to be circumspect and disseminate the right information regarding the current economic crisis and the government’s debt exchange programme in order not to create unnecessary panic among investors.

“This debt exchange provides an orderly way to put our economy back on track. These efforts will be complemented by fiscal measures to protect the neediest and most vulnerable in society. The Government expects overwhelming support for this exchange.

“And in truth, the success of this necessary endeavour depends, of course, upon the public’s cooperation. That will also mean the media being helpful in disseminating the right information to economic actors. We are all in this together, and we intend to get out of this together,” Mr Ofori-Atta said.