Finance
Debt exchange: GH₵15bn fund to support financial sector

The size of Ghana Financial Stability Fund (GFSF) being established by government with the support of development partners is worth GH₵15 billion.
Encouraging full participation of financial institutions
This is to support and encourage full participation of financial institutions in the voluntary Debt Exchange programme.
GH₵137bn notes and bonds
The Fund will provide liquidity to financial institutions that participate fully in the Debt Exchange involving GH₵137 billion notes and bonds including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued.
T-Bills, notes and bonds held by individuals exempted
The Exchange excludes Treasury Bills in totality, and notes and bonds held by individuals.
Institutions to be supported
All financial institutions (banks, SDIs, pension schemes, collective investment schemes, fund managers, broker/dealers, insurance firms) that fully participate in the Debt Exchange can access the GFSF for augmented liquidity support, with effect from the date of completion of the Debt Exchange.
BoG to manage Ghana Financial Stability Fund
A statement issued by the Financial Stability Council of the Bank of Ghana (BoG) said the Fund will be managed by BoG under unique operational guidelines being developed by the Financial Stability Council.
Financial Stability Council to provide advice and oversight
The Financial Stability Council will provide ongoing advice and oversight for the use of the GFSF.
Regulators in discussions with external auditors of financial institutions
The statement noted that regulators are already in discussions with external auditors of financial institutions and will provide guidance to ensure a standardized approach to the accounting treatment applied to the Debt Exchange.
Stress tests conducted by relevant financial sector
According to the Council, stress tests have been conducted by the relevant financial sector regulators to estimate the potential impact of the Debt Exchange for banks, specialised deposit-taking institutions (SDIs), insurance firms, asset managers, collective investment schemes, pension fund trustees, and regulated pension schemes, that could result from their participation in the debt exchange.
Regulatory and supervisory tools to be deployed
To help manage the potential impacts of the Debt Exchange on the financial sector, the statement said financial sector regulators will deploy all regulatory and supervisory tools to mitigate risks to financial stability.
Regulators to assess impacts on regular basis
It added that regulators will assess impacts on a regular basis, and quickly address evolving risks in order to safeguard financial stability.
Regulatory capital and liquidity requirements to be reduced temporarily
The Financial Stability Council noted that financial sector regulators will temporarily reduce regulatory capital and liquidity requirements for regulated firms and schemes that voluntarily participate in the debt operation.
Regulators to suspend or delay any new rules
In addition, it said regulators will also suspend or delay any new rules that will have an adverse impact on liquidity or solvency while each regulator will communicate more specific reliefs to its regulated firms/schemes in due course.
In keeping with its mandate, the Financial Stability Council pledged to continue to closely monitor the impacts of the Debt Exchange on financial institutions and on the financial system as a whole, as well as the effectiveness of the measures outlined above.
“These measures will be reviewed continuously and recalibrated as needed to ensure maximum effectiveness to safeguard the stability of our financial system and the protection of deposits, pensions, policy holders’ funds, and investor funds/assets,” the statement.
GH¢467.3bn public debt
The Debt Exchange expected to reduce the public debt which stood at GH¢467.3 billion (GH¢467,371.31 million) or the equivalent of $48.8 billion ($48,871.34 million) as at the end of September 2022.
The latest debt sustainability analysis had demonstrated that Ghana is faced with a significant financing gap over the coming years revealing that public debt is unsustainable.
When successful, the Debt Exchange will also open up financing streams and provide the needed balance of payment support from the International Monetary Fund (IMF).
4 legged approach
The debt restructuring which is expected to deal with high interest payments on the public debt is part of a four legged approach adopted by the government in 2023 budget aimed at alleviating the pressures on the national budget and restoring debt sustainability.
4 New Ghana bonds
Domestic debt operation involves an exchange for new Ghana bonds with a coupon that steps up to 10% as soon as 2025 (with a first interest payment in 2024) and longer average maturity.
Maturing dates for the new bonds
Existing domestic bonds as of December 1 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.
Predetermined allocation ratios
Predetermined allocation ratios are 17% for the short bonds, 17% for the intermediate bond, 25% for the medium-term bond and 41% for the long-term bond.
Annual coupon rates
The annual coupon rates on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity. Coupon payments will be semi-annual.
Eligible holders, who deliver valid offers at or prior to the expiration date that are accepted by the country, will receive at the settlement date in exchange for their eligible bonds accepted, the same aggregate principal amount distributed across new bonds due dates.
Offers end on December 19
Offers may only be submitted starting from December 5, 2022, and ending at 4:00 p.m. (Greenwich Mean Time (GMT)) on December 19, 2022.
Sole discretion to extend expiration date
However, government may at its sole discretion extend the expiration date, including for one or more series of eligible bonds.
Only registered holders eligible
The invitation is available only to registered holders of eligible bonds that are not individual investors or that are otherwise authorised by the Government of Ghana, in its sole discretion, to participate in the Invitation.
Government said eligible holders tendering their eligible bonds pursuant to the invitation will receive new bonds of the country on the terms and subject to the conditions described in the Exchange Memorandum.
All offers irrevocable
All offers to exchange eligible bonds made by eligible holders are irrevocable and by tendering their eligible bonds, eligible holders represented and warrant.
Such eligible bonds constitute all the eligible bonds owned by them and consent to the blocking by the Central Securities Depository of any attempt to transfer them prior to the settlement date or the termination of the invitation.
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Finance
Ofori-Atta appeals to Parliament to approve revenue measures

Finance Minister Ken Ofori-Atta has informed parliament of his intention to present necessary fiscal adjustments to the house in august after the debt operation is completed.
Outstanding revenue mobilisation bills
Already, he said the Income Tax (Amendment) Bill, Excise Duty & Excise Tax Stamp (Amendment) Bills as well as the Growth and Sustainability Levy Bill, are outstanding in Parliament.
According to him, the consideration and approval of fiscal measures by Parliament are critical for recovery from the current economic crisis.
Facilitating IMF Board approval
The Minister therefore entreated Parliament to prioritise the approval of the outstanding revenue mobilisation bills to facilitate the Board Approval for International Monetary Fund (IMF) Programme staff level agreement by the end of March, 2023.
“We are still counting on you for the passage of all the outstanding revenue Bills which are necessary for effective Budget Implementation as well as boosting our efforts at increasing our Tax-to-GDP from less than 13% to the sub-Saharan average of 18,” he stated.
Expected impact of IMF Board approval
He is confident IMF Board approval will restore macro-economic stability, ensure debt sustainability as well as provide critical social protection for the benefit of Ghanaians.
Factors that impacted economy negatively
COVID-19, Russia-Ukraine war, soaring energy and food prices, higher interest rates, a strong dollar and a global slowdown negatively affected the economy.
Ghana seeking $3 billion loan
Ghana and the International Monetary Fund (IMF) have reached staff-level agreement on economic policies and reforms to be supported by a new three-year arrangement under the Extended Credit Facility (ECF) of about $3 billion.
But, the IMF has made it clear that the Board approval of the deal is contingent on a successful debt exchange programme.
Broader govt response strategy
Addressing Parliament on the ongoing debt restructuring efforts, Ofori-Atta explained that debt operations are a composite part of a broader government response strategy for addressing the current challenges.
While being optimistic about IMF programme to boost confidence in the economy, he emphasized that complementing it with enhanced domestic mobilisation efforts is critical.
4 out of 5 agreed Prior Actions in the Staff Level Agreement
The Finance Minister averred that the passage of the Bills will enable government to complete four out of five agreed Prior Actions in the Staff Level Agreement.
Agreed Prior Actions already implemented
He noted that tariff adjustment by the Public Utilities Regulatory Commission (PURC), Publication of the Auditor-General’s Report on COVID-19 Spending, and Onboarding of Ghana Education Trust Fund (GETFund), District Assemblies Common Fund (DACF) and Road Fund on the Ghana integrated financial management information system (GIFMIS) have all been completed.
International and domestic bond markets are shut
Ofori-Atta reminded the legislators that the international and domestic bond markets are shut for the financing of government’s programmes, forcing government to rely on the Treasury Bills and concessional loans as the primary sources of financing for the 2023 fiscal year.
Therefore, he called on Parliament to support the government’s financing requests to ensure a smooth recovery from the economic challenges.
He thanked everyone who tendered and supported the Domestic Debt Exchange programme saying “It is a truly remarkable act of sacrifice in our nation’s history. We thank those who heeded our clarion call and took the selfless, patriotic decision to participate. Your names and deeds will never be forgotten. Your timely support is deeply appreciated,”.
He is confident that the programme government has set out for this year, supported by Parliament, will get Ghana out of the economic crisis that has hit the economy since Covid-19.
Inflation interest and exchange rates to stabilise
He hopes for stability in the exchange rates, inflation and interest rates, bringing businesses and families some respite.
Suspension of payments of interest on foreign debt
Government also announced a suspension of all debt service payments for certain categories of external debt, pending an orderly restructuring.
International bondholders
Ofori-Atta revealed that Ghana initiated discussions with representatives of international bondholders and their Advisors.
According to him, substantive discussions are due to start with them in the weeks to come.
G-20 Debt Treatment initiative
Ghana officially asked its bilateral creditors for a Debt Treatment initiative under the G-20 Common framework.
Negotiations with commercial creditors underway
The Finance minister said the process of negotiations have started in good faith with commercial creditors.
Ofori-Atta stated that two preliminary discussions and exchange of information have started on a good footing with representative committees and advisors.
Creditor Committee to assess Ghana’s request
According to him, the members have indicated their commitment to establish a Creditor Committee to assess Ghana’s request for debt treatment under the Common Framework by end February, 2023.
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Finance
IMF assigns resident financial supervision adviser to BoG

The International Monetary Fund (IMF) has assigned a Resident financial sector supervision adviser to the Bank of Ghana (BoG) to provide technical assistance and help build the capacity of the banking supervision function.
The appointment was at the request of Bank of Ghana with full funding from Switzerland’s State Secretariat for Economic Affairs (SECO).
Mr. Leonard Chumo, the Resident Adviser, started his assignment at the Bank of Ghana on February 6, 2023, and was expected to stay for three years.
A statement issued by BoG in Accra said the Adviser’s placement was a continuation of cooperation in this area between the Bank, the IMF and SECO, that started as early as in 2015 and had already seen the assignment of a previous Adviser until 2018.
It said achievements from the past collaborative efforts include the passage of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), the development and issuance of the Corporate Governance Directive 2018, and the Capital Requirement Directive 2018.
Mr Chumo, brings first-hand knowledge of supervisory work from leading central banks as well as previous technical assistance experience in the Western Africa region.
The statement said among others, he would support the implementation of Pillar two and three of the Basel II/ III capital frameworks, as well as strengthen the Risk-Based Supervisory framework at the Bank of Ghana.
The Bank commended the management of SECO for the continued funding of Long-Term Technical Experts from the IMF to the Bank.
- Misinformation undermining democracy, eroding gains in Ghana – 14 March 2023
- Dr Akoto: With right investment in agric, Ghana will not need IMF – 14 March 2023
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Finance
Govt pledges to pay coupons, principals on all maturing bonds

Government has assured all bondholders, including those who self-exempted from the voluntary Domestic Debt Exchange Programme (DDEP) that it will honour all coupon payments and maturing principals when due.
Payment of coupons and principal for bonds that matured since February 6 to date (herein referred to as ‘Due Bonds’ remain outstanding.
Bondholders want government to make payments not later than Friday, February 17, 2023.
A statement issued by the Finance Ministry indicates that more than 80% bondholders participated in its $137 billion DDEP.
“The DDEP closed on Friday February 10, 2023, with over 80% participation of eligible bonds,” it said.
The Finance Ministry pledged to honour all coupon payments and maturing principals in addition to commitments to further streamline Government’s expenditures.
“We would like to stress that, all Individual bondholders, especially our Senior Citizens, should rest assured that their coupon payments and maturing principals, like all Government bonds, will be honoured in line with Government’s Fiscal commitments.
“The Government would like to reassure all individual bondholders who elected not to participate that your coupon payments and maturing principals, like all Government bonds, will be honoured in line with Government fiscal commitments,” it added.
Government reiterated that the DDEP had been executed to help protect the economy and enhance Ghana’s capacity to service its public debts effectively, as its debt had become unsustainable.
The alternative for not executing the DDEP would have brought grave disorder in the servicing of our national debt and exacerbated the current economic crisis.
It expressed gratitude to bondholders for the overwhelming participation, adding that their support and contributions had gotten Ghana much closer to securing the International Monetary Fund (IMF) programme.
There are fears that those who opt against signing up are not guaranteed market liquidity for the old bonds, because they are likely to become less tradeable on the secondary market compared with the new bonds.
On the other hand, individuals who sign up for the new bonds will have more certainty even in a changing economic landscape.
- Misinformation undermining democracy, eroding gains in Ghana – 14 March 2023
- Dr Akoto: With right investment in agric, Ghana will not need IMF – 14 March 2023
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