The Ghana National Association of Teachers (GNAT) has waded into the on-going debate on the government’s impending Debt Exchange Program set to be rolled out.
According to the teachers, they are interested stakeholders on the Domestic Bond Market, running on the Teachers Fund with its subsidiaries, the Tier-3 Pension Scheme among others.
In a press release dated December 7, 2022, GNAT explained that funds are initiatives taken by the association to better their lives in active service and during retirement.
“It would therefore be suicidal for any government to touch our funds and unruffled our teachers financially, both in active service and retirement.
“We hereby inform our members (teachers) that the Ghana National Association of Teachers (GNAT) has not been invited to any discussion on Domestic Debt Exchange and our stance remain unwavered,” the release signed by General Secretary for GNAT, Thomas Tanko Musah stated.
It continued “We wish to assure them further, that their contributions and savings remain intact, and that we shall fiercely and vigorously resist any attempt to touch the said contributions and savings by the government under any Debt Exchange, Debt Structural Adjustment or whatever measure which would short-change our members, both in active service and retirement.”
Attached is the full statement from GNAT
Government has announced the establishment of a Financial Stability Fund (FSF) in collaboration with development partners to provide liquidity support to banks, pension funds, insurance companies, Fund managers, and collective investment schemes.
This, according to the Finance Minister is to ensure they meet their obligations to clients as they fall due.
In an address on Sunday on the possible haircuts on all bonds and treasury bills following government’s debt restructuring deal with the International Monetary Fund (IMF), Mr. Ofori-Atta said the relevant regulators (BoG, SEC, NIC) in the financial space “will ensure that the impact of the debt operation on your financial institution is minimized, using all regulatory tools available to them.”
He added: “These are difficult times and we count on the support of all Ghanaians and the investor community to make the exercise successful. We are confident that these measures will contribute to restoring macroeconomic stability. With your understanding and support and that of the entire investor community, we shall overcome our current difficulties. and with the help of God, put our economy back on the path of renewed and robust growth.”
Government has announced the modalities of a domestic debt exchange following the conclusion of Debt Sustainability Analysis as part of negotiations with the International Monetary Fund(IMF).
In line with the Ghana Debt Exchange(GDX) programme, domestic bondholders are billed to exchange their instruments for new ones, Finance Minister Ken Ofori-Atta announced at a Presser on Sunday.
According to him, existing domestic bonds as of 1st December 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032, 2037.
“The annual coupon 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,” said the Finance Minister.
Meanwhile, the Finance Minister stressed “There will be NO haircut on the principal of bonds, adding Individual holders of bonds will not be affected.