Don’t engage in panic withdrawals – Dr. Stephen warns Ghanaians amid Debt Exchange Programme

Dr. Stephen Amoah said if the bond holders can wait until the economy is a bit more stabilised, it is possible that the returns on their bonds will increase.

“Sometimes some people say they have withdrawn their bonds and the money has decreased, it is true, it is not the government that has decreased it, it is not the government’s measures that cause it, it is implied market forces, and so for those saying they will not agree to the Domestic Debt Exchange programme, they have the right to do so and no one can force them, but the truth is that even if you want to go the natural way, the implied market forces can reduce their assets” he said

“The government is not forcing anyone, and it is not going to force anyone to accept what it has proposed, so if you do not agree, it is not a problem; however, as of now, you must either wait for your bond to mature, wait for the economy to improve, or make a panic withdrawal.

“If you do this, the market’s implied forces, not the bank or the government, will reduce your returns, so people should understand this clearly,” he stated.

Dr Stephen Amoah added that the implied market forces were at play all the time, even before the government proposed the Domestic Debt Exchange programme.

The government last Monday launched the Domestic Debt Exchange programme which was first announced in the 2023 budget.

The programme involves the swapping of existing domestic bonds with longer-dated bonds that will take between five and 14 years to mature in 2037.

This means the extension of the repayment period for the bonds issued and held locally to allow for a staggered and phased payment of both the interest and the principal.

The annual coupon on all of these new bonds will be set at zero per cent in 2023, five per cent in 2024 and 10 per cent from 2025 until maturity.