At the current inflation rate of 54.1%, according to the Ghana Individual Bondholders Forum, investors run the risk of losing 88.2% of their money.
The bondholders provided the President with a petition in response to his declaration that there will be no haircuts on investments in his speech on December 5, 2022.
The President advised ignoring and discarding any reports of haircuts.
However, the government subsequently declared that a restructuring is required due to its significant indebtedness.
The individual bondholders however said the government did not have prior negotiations with them before announcing their inclusion in the programme on December 24, 2022.
They said: “But today, our coupons face absolute haircuts and when we discount your proposed benchmark bonds at the coupon rates of the original bonds, we are losing effectively 50% of our investments. When discounted at current T-bill rates, we are losing 71% of our investments, and at prevailing inflation, we face an 88.2% loss.”
This they noted was a complete deviation from what was promised by the government.
The statement however said “nothing was missing, small or great. I say to you, nothing will be lost, nothing will be missing, and nothing will be broken. We will, together, recover all” as quoted by the President has now become “Great will be lost, too much is missing, everything is broken, you will not recover, your livelihoods shall be destroyed.”
The bondholders in their petition want the government to exclude all individual bondholders of all types of government bonds from the domestic debt exchange programme.
They explained that individual bondholders are not a critical factor in the success of the programme.
“In our estimation, the direct individual bondholding and holdings through collective investment schemes stand at about GHS15.5bn, representing about 11% of the eligible bonds and the capitalized interest. With your set target of 80% of eligible bonds, Individual Bondholders are not a critical success factor to the viability of the DDE programme as you envisage, yet the impact of their inclusion has incalculable consequences. Please exclude us and save 1.3mn livelihoods and dependents from shackled penury,” they said.
The forum led by Senyo Hosi and David Tetteh pleaded with the President to ensure that it is “not said ever that during your tenure, your policies impoverished citizens whose primary duty to country was service and love through hard work and taxes. Your DDE as proposed for Individual Bondholders takes away our liberty to self-sustain, mocks hard work, and robs us of legally acquired property. None of these reflect the tenets of good governance.”