• Latest
  • Trending
Cecilia Dapaah

What really is the debt exchange programme? – An explainer

January 13, 2023
Yamin

Joseph Yamin predicts the next guru to resign from the NPP

September 26, 2023
Alan Kyerematen

Don’t try me – Alan Kyerematen warns NPP

September 26, 2023
NPP

NPP charges all ministers, gov’t appointees to follow Alan Kyerematen’s steps

September 26, 2023
Barker-Vormawor

Kan Dapaah sues Barker-Vormawor over bribery allegation; demands GH¢10m

September 26, 2023
Chairman Wontumi

“You and your girlfriends had a lot of fun when Kufuor made you ambassador” – Wontumi ‘exposes’ Alan Kyerematen

September 26, 2023
Alan Kyerematen

Top NPP stalwarts who joined Alan’s to announce Independent candidacy

September 26, 2023
Alan Kyerematen butterfly

All you need to know about the relevance and symbolism of Alan Kyerematen’s Monarch Butterfly

September 26, 2023
Alan Kyerematen

Three pro-Alan MPs distance themselves from his independent presidential bid

September 26, 2023
Buipe

Buipe devastated by floods, about 1,500 residents displaced

September 26, 2023
Alan Kyerematen

Throwback: What B.J. da Rocha predicted about Alan Kyerematen in 2008

September 26, 2023
NPP

NPP Fights UTV Over Attacks On Government; Tells them to Reform United Showbiz

September 26, 2023
Sammy Gyamfi

Alan Kyerematen is not and cannot be the solution to the mess he participated in creating – Sammy Gyamfi

September 25, 2023
ADVERTISEMENT
  • HOME
  • POLITICS
  • GENERAL NEWS
  • INTERNATIONAL NEWS
  • SCHOLARSHIP
  • OPINION
  • JOBS
  • SPORTS
  • Entertainment
InsiderGH.com
  • HOME
  • POLITICS
  • GENERAL NEWS
  • INTERNATIONAL NEWS
  • SCHOLARSHIP
  • OPINION
  • JOBS
  • SPORTS
  • Entertainment
No Result
View All Result
  • HOME
  • POLITICS
  • GENERAL NEWS
  • INTERNATIONAL NEWS
  • SCHOLARSHIP
  • OPINION
  • JOBS
  • SPORTS
  • Entertainment
No Result
View All Result
InsiderGH.com
No Result
View All Result
ADVERTISEMENT
Home News Business

What really is the debt exchange programme? – An explainer

January 13, 2023
in Business
Reading Time: 4 mins read
1
Cecilia Dapaah

Ken Ofori-Atta, Minister of Finance

Kindly share

The term ‘debt exchange’ has become one of the most frequently used phrases in Ghana’s media space in recent times.

This financial phrase is being used by government officials, politicians, and experts in reference to how the government of Ghana is going to handle the huge debt it has accrued over the past few years, which many believe has caused the economic challenges in the country.

The government, through the Ministry of Finance, announced a debt exchange programme, dubbed the Domestic Debt Exchange (DDE) programme.

Related Posts

  • Suspend debt exchange programme immediately – Minority to…
  • Cedi could exchange for GHC100 to US$1 if debt restructuring…
  • DDEP will wipe life savings of over 6 million Ghanaians –…

The announcement led to some commotion in the labour sector, and after threats of strikes, the government amended some details of the DDE.

But ordinary Ghanaians, who may even be affected by this debt Exchange programme, do not have a full grasp of what it is.

This article seeks to shed some light on everything about the debt Exchange programme.

What is a bond?:

Every government in the world, including those of advanced countries like Germany and the United States, borrows domestically (from its citizens) and internationally to run their economies.

It accomplishes this by issuing debt instruments such as bonds through financial intermediaries such as banks and other financial institutions.

The government promises an ordinary Ghanaian profit (interest) if s/he lends it a said amount of money (principal) after an agreed period of time. This agreement is what is referred to as bonds (government bonds).

Debt Exchange:

Now, what the government is seeking to do with its debt exchange programme, the DDE, is to amend the interest it promised the Ghanaian who loaned it money (the bondholder) and the duration for which the lender is supposed to get his interest and principal back.

In other words, the government is swapping the agreement (the time and the promised interest) it had with the bondholder with a new one (new interest (s) and/or new duration(s)), hence the name, debt exchange.

For example, if you held a government bond as of December 1, 2022, which was supposed to mature in 2025, the government is now promising you four new bonds (agreements) which are expected to mature in 2027, 2029, 2029, 2032 and 2037. And you are expected to earn 0% interest in 2023, 5% interest in 2024, and 10% in 2025, which will continue till the maturity of your bond (when you are expected to get your investment with the promised interest).

Consequences of debt exchange:

So, why are a lot of bondholders kicking against the government’s proposal? Are they going to lose their money?

Well, most of these rejections are based on arguments about the time value of money. That is, even though bondholders will get their investment back, getting it at a future date means the value of the money they receive will reduce due to inflationary pressures.

In other words, you can use the GH¢100,000 you will receive to buy a house in 2023, but you may not be able to buy the same house with GH¢100,000 in 2027.

Also, some bondholders live on the interest they receive from the government, so not getting it will affect their livelihood.

Who will the DDE programme affect?

Initially, the government stated that the programme would affect securities dealers and funds, private banks and investment companies, insurance schemes, pension funds, and non-resident investors.

But after pressure and threats of strikes by labour unions, the government excluded pension funds which could have affected groups such as Mineworkers Union Trades Union Congress Ghana Medical Association Chamber of Corporate Trustees Ghana Securities Industry Association Health Services Workers’ Union Ghana National Association of Teachers National Association of Graduate Ghana Registered Nurses and Midwives Association.

Now, the government has included individual bondholders in the DDE programme.

But, even before the inclusion of individual bonds, a lot of Ghanaians were indirectly affected because financial institutions that were included in the programme could not pay them their interest and principal.

What happens if you decide not to take the government’s DDE offer:

Well, the DDE is a voluntary programme and the government has given timelines, which it has updated on several occasions, for domestic bondholders to join. There are reports of intermediaries of government bonds sending alerts to holders to sign on to the programme.

Even though the government has not stated any penalty for not joining the programme, there is a likelihood of government bondholders experiencing some undesired consequences.

For instance, if the maturity date for your bond is up, there is a possibility that you may not be paid your money and the only option you have is to sue the government for not paying you.

Another possibility is that you are likely to lose the entire interest on your bond and even parts of your principal just as some Ghanaians who have invested in private bonds of financial institutions like Data Bank are experiencing.

Tags: Debt Exchange Programme
Previous Post

Akufo-Addo has good reason to back either Bawumia or Alan – Adom-Otchere explains

Next Post

Former NPP MP accused of inciting delegates to vote against Bawumia because he is Muslim

Related Posts

Hostess Brands
Business

JM Smucker to Acquire Hostess Brands in a $5.6 Billion Deal

September 12, 2023
China's economy
Business

Is China’s economy a ‘ticking time bomb’?

September 3, 2023
Inflation
Business

Inflation rises for the third consecutive month; hits 43.1% for July

August 9, 2023
Beige Bank trial
Business

Investigator reveals GHS21,123,270 transferred to 10 companies and 2 individuals in Beige Bank trial

August 3, 2023
BoG’s financial director’s
Business

Bank of Ghana records GH¢60.81bn loss in 2022

July 30, 2023
Goosehead Insurance
Business

Goosehead Insurance sees net income swell to $7.2m in Q2

July 28, 2023
Next Post
Bawumia

Former NPP MP accused of inciting delegates to vote against Bawumia because he is Muslim

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

  • Trending
  • Comments
  • Latest
Congo coup

BREAKING: Coup underway in Congo-Brazzaville while 79-year-old President  is in the US for UN Summit

September 17, 2023
Gabon coup

BREAKING:Senior Military Officers Announce Coup in Gabon After Rigged Presidential Election

August 30, 2023
Mahama wins NDC presidential race

BREAKING: Mahama officially declares intention to contest for presidency

February 21, 2023
soldiers at ashaiman

Ashaiman: More than 72 people arrested by soldiers – Ashaiman MP

March 7, 2023
Rayzone Group

Government paid $2M to Israeli firm for spy work in 2021- Report

August 2, 2023
NDC Primaries: Ten under 40 MP aspirants to watch

NDC Primaries: Ten under 40 MP aspirants to watch

February 14, 2023
National Cathedral

Okudzeto Ablakwa Drops Bombshell; Publishes The Mother Of All National Cathedral Scandals

January 16, 2023
Alabi Picks Forms For Mahama

Prof. Alabi Picks Forms For Mahama; Says Economy Is In Shambles, Ghanaians Need Him Back

February 22, 2023
Rayzone Group

Government paid $2M to Israeli firm for spy work in 2021- Report

172
Cecilia Dapaah

Cecilia Dapaah: Hotelier, ex-Bantama MP, former Minister mired in a money heist

39
Speaker sets up 7 member C’ttee to probe leaked tape on plot to remove IGP

Gyakye Quayson’s daily trial ‘selective and wrong’ – Bagbin

13
If you had good intentions for NDC, you would have engaged party elders – Zita to Duffour

If you had good intentions for NDC, you would have engaged party elders – Zita to Duffour

13
Mahama’s running mate

BREAKING: NDC Changes Its Leadership In Parliament

10
Supreme Court turned into Stupid Court comment: I’m not talking of Ghana’s judiciary – Kpessa-Whyte clarifies

Supreme Court turned into Stupid Court comment: I’m not talking of Ghana’s judiciary – Kpessa-Whyte clarifies

9
Ablakwa

How Adom-Otchere triggered Ablakwa to release latest set of allegations against Rev. Kusi Boateng

9
NDC has been the best since Ghana's independence – Dr. Duffuor

Duffuor calls for postponement of NDC primaries

8
Yamin

Joseph Yamin predicts the next guru to resign from the NPP

September 26, 2023
Alan Kyerematen

Don’t try me – Alan Kyerematen warns NPP

September 26, 2023
NPP

NPP charges all ministers, gov’t appointees to follow Alan Kyerematen’s steps

September 26, 2023
Barker-Vormawor

Kan Dapaah sues Barker-Vormawor over bribery allegation; demands GH¢10m

September 26, 2023
Chairman Wontumi

“You and your girlfriends had a lot of fun when Kufuor made you ambassador” – Wontumi ‘exposes’ Alan Kyerematen

September 26, 2023
Alan Kyerematen

Top NPP stalwarts who joined Alan’s to announce Independent candidacy

September 26, 2023
Alan Kyerematen butterfly

All you need to know about the relevance and symbolism of Alan Kyerematen’s Monarch Butterfly

September 26, 2023
Alan Kyerematen

Three pro-Alan MPs distance themselves from his independent presidential bid

September 26, 2023

KINDLY SUBSCRIBE TO INSIDERGH TV

CLICK HERE TO SUBSCRIBE TO OUR YOUTUBE CHANNEL

Recent News

Yamin

Joseph Yamin predicts the next guru to resign from the NPP

September 26, 2023
Alan Kyerematen

Don’t try me – Alan Kyerematen warns NPP

September 26, 2023
NPP

NPP charges all ministers, gov’t appointees to follow Alan Kyerematen’s steps

September 26, 2023
Barker-Vormawor

Kan Dapaah sues Barker-Vormawor over bribery allegation; demands GH¢10m

September 26, 2023

InsiderGH.com

InsiderGH.com

InsiderGH.com is the fastest growing socio-political news portal in Ghana. Get all breaking news updates, latest news headlines, local and international stories, showbiz, lifestyle etc.

Follow Us

Browse by Category

  • Apps
  • BIOGRAPHY
  • Business
  • Entertainment
  • Fashion
  • Food
  • Gadget
  • Gaming
  • GENERAL NEWS
  • Health
  • INTERNATIONAL NEWS
  • Lifestyle
  • Mobile
  • Movie
  • Music
  • News
  • OPINION
  • POLITICS
  • Review
  • SCHOLARSHIP
  • Science
  • SPORTS
  • Startup
  • Tech
  • Travel
  • World

Pages

  • ABOUT US
  • CONTACT US
  • COOKIE POLICY (EU)
  • DISCLAIMER
  • HOME
  • PRIVACY POLICY
  • Terms and Conditions
  • TERMS OF USE

Copyright © 2020 - 2023, InsiderGH.com. All rights reserved.

No Result
View All Result
  • HOME
  • POLITICS
  • GENERAL NEWS
  • INTERNATIONAL NEWS
  • SCHOLARSHIP
  • OPINION
  • JOBS
  • SPORTS
  • Entertainment

Copyright © 2020 - 2023, InsiderGH.com. All rights reserved.

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in .

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Policy and Cookie Policy.
InsiderGH.com
InsiderGH.com  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

3rd Party Cookies

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

Please enable Strictly Necessary Cookies first so that we can save your preferences!

Additional Cookies

This website uses the following additional cookies:

(List the cookies that you are using on the website here.)

Please enable Strictly Necessary Cookies first so that we can save your preferences!

Cookie Policy

More information about our Cookie Policy