Ofori-Atta: Join DDEP to avoid further strain on economy

Finance Minister Ken Ofori-Atta has cautioned that non-participation or a lower-than-expected turnout for the Domestic Debt Exchange Programme (DDEP) will prolong efforts to resolve the current economic crisis.

Jeopardizing prospects of international financial support

He expressed concern that the consequence of such development is that the prospects of international financial support and other financial assurances will be jeopardized.

Further strain and stress on govt’s capacity to honour key commitments

In an address to update to the nation on the progress of DDEP, Ofori-Atta said such a situation could further put strain and stress on the Government’s capacity to honour key commitments adding “this is not what we want for our economy”.

Desire for stable, vibrant, productive, dynamic economy

“What we want is an economy that is back on track, stable, vibrant, productive, dynamic; meeting the needs of individuals, households, and enterprises; delivering shared and inclusive growth; and improving incomes and livelihoods.

These are difficult times

“These are difficult times, no doubt, but if we hold on together, we can and we will emerge from this more resilient and more united than before.

“Then we shall, together, continue rebuilding our economy again; and enable businesses to thrive again; and bring back hope and cheer to our homes again,” he stressed.

Restoring macro-economic stability

The Finance Minister explained that the singular motivation for taking this rather difficult road is to restore macro-economic stability, achieve debt sustainability and get the economy fully back on track.

Restoring hope to Ghanaians

He pointed out that these are necessary pre-conditions for creating jobs, safeguarding, and enhancing incomes, fostering inclusive growth, and restoring hope to Ghanaians.

Avoiding a full-blown economic crisis

Ofori-Atta is confident that through collective hard work and discipline, coupled with the abiding and abundant grace of the Almighty God, government remained focused on avoiding a full-blown economic crisis.

Remarkable progress with IMF

He announced that remarkable progress with the on-going International Monetary Fund (IMF) Programme is a significant boost to recovery efforts saying “continuous progress will further steer us away from the slippery precipice we recently faced. Therefore, the momentum must be sustained.”

Consider the merit of the enhanced DDEP

The Finance Minister explained that considering the importance of a sustained economic recovery backed by an approved IMF programme in the first quarter 2023, it is crucial for groups and individuals to consider the merit of the enhanced DDEP, as well as the need for economic stability; and sign up by today to make it a successful one.

He encouraged every Ghanaian that the DDEP will bring the country to a place of stability, economic recovery and transformational growth.

Improved offer for individual bondholders

Under the improved offer, all individual bondholders who are below the age of 59 years (Category A) are being offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 10% coupon rate

Improved offer for retirees

All retirees (including those retiring in 2023) (Category A) are being offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 15% coupon rate.

Ofori-Atta said the objective of this is to ensure that individuals, especially retirees, who put their hard earned savings in the domestic market, are not left in hardship as a result of the DDEP and yet contribute to the resolution of the current crisis.

He said government was intentional in pushing the threshold of what is possible, in order to safeguard the well-being of our pensioners, preserve the savings of individuals, protect the working capital of businesses, ensure the health and stability of our financial sector and restore macroeconomic stability.

Significant amendments made

Significant amendments have enabled government to reach an agreement with key major domestic creditor categories including banks, insurance companies, capital market players and foreign holders of domestic debt in relation to their participation in the DDEP.

All of the institutional bondholders will be paid a 5% coupon on its 2023 bonds.

All other restructured bonds will pay 9% coupons, rather than the variable rates originally outlined.

Under the agreement, the government has removed all clauses in the Exchange Memorandum that empower the government to, at its sole discretion, vary the terms of the Exchange.

The Finance Minister described the participation of the banks, insurance companies and the securities industry; under the enhanced DDEP as a significant milestone which represents a response to a call to national duty

He encourages eligible Individual Holders to voluntarily tender their holdings adding that government expects the full participation of institutional stakeholders and mobilization of all qualified investors, to ensure the success of the debt exchange operation;

Ofori-Atta assured that government is resolved to continue to undertake all necessary fiscal adjustments that would ensure that our sacrifices will pay-off and the collective good is upheld