A group of individual bondholders is threatening to take legal action against the government for including them in the controversial debt exchange programme.

The group, known as the Ghana Individual Bondholders’ Forum in a statement signed by one of its convenors Senyo Hosi urged individual bondholders to reject and refrain from complying with the mandatory deadline imposed under the Domestic Debt Exchange (DDE) programme.

It further urged indirect bondholders such as investors in mutual funds, cash trusts, and balance funds to inform their fund managers not to accept the DDE.

It also advised government to open a channel of communication for “immediate frank, transparent and sincere dialogue on the DDE with the IBF with the view to seeking an effective resolution to the developing impasse and the fast-depleting confidence in the Ghanaian economy.”

“The medium- to long-term prospect and outlook of the domestic investment culture in Ghana is going to be affected by this DDE initiative and we call on government to demonstrate the needed sensitivity to enable a constructive resolution in the best interest of all,” it added.

The government in December disclosed that the group of bondholders who hitherto were exempted from the local debt exchange program will be included in the program.

The decision to include the individual bondholders was taken after the government yielded to demands by Labour Union to exempt pension funds from the debt exchange programme.

Ghana in December further extended the deadline to register for its domestic debt exchange to January 16 in order to “secure internal approvals” from the financial sector, according to the Finance Ministry.

The Ministry of Finance also announced a change to the debt exchange, with eight additional instruments to be created.

Under the original plan, local bonds were to be exchanged for new ones maturing in 2027, 2029, 2032, and 2037, with annual coupons set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity.

Announcing the latest extension, the Finance Ministry said that eight additional instruments would be created, bringing the total number of new bonds to 12, with one maturing each year from 2027 to 2038.

The Ghana Individual Bondholders’ Forum said the following in its statement:

Pending further consultations and engagements (including the pursuit of legal action where necessary),
we entreat as follows:

1. Direct Bondholders:
Reject and refrain from complying with the mandatory deadline imposed under the DDE program
and join the efforts of the IBF.

2. Indirect Bondholders (Investors in mutual funds, cash trusts, balance funds).
Inform your fund managers not to accept the DDE.

3. Government

Kindly open a channel of communication for immediate frank, transparent and sincere dialogue on the DDE with the IBF with the view to seeking an effective resolution to the developing impasse and the fast-depleting confidence in the Ghanaian economy.