Ghana: Chamber of Corporate Trustees rejects government debt exchange programme

The Chamber of Corporate Trustees has rejected the Debt Exchange Programme publicised by the government.

In a statement, the Chamber said approving the programme will affect the interest of contributors to pension schemes.

The statement signed by Thomas Kwesi Esso also advised pension providers and administrators to involve the government in constant engagement for an improvement to the terms of the restructuring.

In addition, the Chamber has pointed that the proposal put forth by the Finance Minister, Ken Ofori-Atta is “inferior to market expectations and will destroy the savings of Ghanaians and further undermine market confidence”.

“This is why we reject it outright. We indulge contributors to pension funds and actors in the pensions industry to remain calm as we seek the best outcome in our negotiations with the Ministry of Finance.”

The Chamber has guaranteed all its members that it has not yet approved to the debt exchange programme by the government.

As part of procedures to restructure the country’s debt burden, the government has launched a debt exchange programme.

The Minister for Finance, Ken Ofori-Atta speaking during the launch of the programme on Monday, December 5, 2022, said the aim is “to invite holders of domestic debt to voluntarily exchange approximately GHS137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic.”

Below is the full statement by the Chamber of Corporate Trustees

On 30th October 2022, The President of Ghana Nana Addo Dankwa Akuffo Addo addressed the nation and assured all Ghanaians that “there would be no haircuts on pension funds”.

A few weeks after this announcement, we are all witnessing, rather surprisingly, a major U-turn from that position.

We have carefully analyzed the announcement by the Minister of Finance on the Debt Exchange Program and are of the opinion that it is injurious to the interest of contributors to pension schemes.

The Pensions Chamber would like to assure contributors to pension schemes that the industry has not agreed to the debt exchange programme proposed by the Ministry of Finance.

As Trustees, we hold a fiduciary responsibility and are enjoined to seek the best interest of contributors at all times.

We encourage all contributors to pension schemes to seek further information from their pension providers/administrators as we engage further with the government for an improvement to the terms of the restructuring.

We recognize that inflation has caused significant harm to pension fund assets this year and that there is an urgent need to reduce the Government debt burden and restore macroeconomic stability. That should however not be done to the detriment of contributors to pension schemes.

We share in Government’s call for burden sharing, but that should be done in the spirit of fairness to ensure a win-win outcome to all stakeholders.

The proposal as put forth by the Minister of Finance is inferior to market expectations and will destroy the savings of Ghanaians and further undermine market confidence.

This is why we reject it outright. We indulge contributors to pension funds and actors in the pensions industry to remain calm as we seek the best outcome in our negotiations with the Ministry of Finance.

We will duly inform members of the outcome of our deliberations.