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Government’s request that private pensions forfeit some interest payments on government bonds to help it restructure debt appears not to sit well with some pensioners.
The move, which is to qualify the country for a 3-billion-dollar support from International Monetary Fund, has been subjected to public scrutiny.
Government launched a portal on Monday, December 5 where domestic bondholders can apply until December 19 to replace about $10.4 billion existing debt with new bonds maturing in 2027, 2029, 2032 and 2037.
Interest on the new bonds will not accrue until 2024 to reduce the country’s debt burden. Investors won’t receive annual coupon payments in 2023, 5% in 2024 and 10% from 2025 onward, according to the Ministry of Finance.
There have been public concerns that pension funds are likely to be affected under the restructuring programme.
A pensioner, Stephen Gyakye believes government has several options of reducing the country’s debt rather than forfeiting interest payments on bonds and touching pension funds
The 75-year-old fears the debt exchange programme may affect pension fund.
The country had $29.9 billion of debt at the end of June, and debt-serving costs equivalent to 68% of tax revenue over the same period, according to budget data.
Ghana’s cedi, the world’s worst-performing currency against the dollar this year, has lost 53% of its value, increasing the cost of servicing the loans.
By Ibrahim Abubakar/uniquenewsgh
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