The Ministry of Finance has categorically denied rumors circulating on social media that Consolidated Bank Ghana (CBG) has been sold to a foreign entity. In an official statement, the Ministry described these claims as “entirely false and misleading.
According to the Ministry, CBG remains a fully state-owned entity, having transitioned from a bridge bank into a universal bank with a licence from the Bank of Ghana. It reaffirmed the bank’s stability, assuring the public that there is no cause for concern regarding the security of customer deposits.
“The Ministry of Finance refutes recent social media reports alleging that Consolidated Bank Ghana (CBG) has been sold to a foreign investor. We wish to state that CBG has not been sold, and these reports are entirely false and misleading. CBG remains solely a state-owned bank after it was converted from a bridge bank into a universal bank and licensed by the Bank of Ghana,” the statement read.
Addressing concerns raised by these rumours, the Ministry highlighted the bank’s sound financial position, reassuring the public that CBG’s operational integrity remains intact. The statement urged Ghanaians to rely on official communication channels for updates regarding the bank.
“CBG therefore is in a sound financial position, and there is no cause for concern regarding the security of customers’ deposits or the bank’s operational integrity. We urge the public to disregard these misleading reports and rely on official communication channels for any information concerning the bank,” the Ministry added.
In a separate statement, CBG itself responded to the social media rumours, denying claims that it had been acquired by a Swiss company. The bank reiterated that it remains wholly owned by the Government of Ghana and assured customers that their deposits are safe.
“Consolidated Bank Ghana LTD (CBG) wishes to categorically refute social media reports alleging that the Bank has been sold. There has been no change in the ownership of the Bank, and the Government of Ghana remains the sole shareholder. We wish to state that reports of the sale of the Bank are entirely false and misleading,” the bank’s statement declared.
The Ministry also noted that the government has strengthened the bank’s capital over the past two years as part of the Domestic Debt Exchange Programme (DDEP) and the broader Ghana Financial Sector Strengthening Strategy (GFSSS), which is supported by the International Monetary Fund (IMF). These measures aim to support local financial institutions and protect jobs.
Both the Ministry of Finance and CBG have urged the public to disregard inaccurate information and to depend on official sources for credible updates on the bank’s status.
The Government of Ghana, through the Ministry of Finance, has approved the release of GHC1.5 billion to continue the bailout program for investors affected by the collapse of fund management companies whose licenses were revoked in November 2019.
This move follows a recent announcement by the Minister of Finance during his monthly economic update.
The bailout program, aimed at providing financial relief to thousands of investors, will be rolled out in three phases, according to the Security Exchange Commission (SEC).
The first tranche of GHC700 million is set to be disbursed in August 2024, followed by GHC400 million each in October and December 2024. This new release is in addition to the GHC4.46 billion previously allocated to settle claims of investors who were affected by the revocation of licenses of these firms.
The funds will be used to continue the settlement of investor claims, which include those from Blackshield Capital Management Limited (formerly Gold Coast Fund Management Limited) and Kron Capital Limited. The Securities and Exchange Commission (SEC), established under the Securities Industry Act, 2016 (Act 929) and amended by the Securities Industry (Amendment) 2021 (Act 1062), is overseeing the bailout to ensure fairness, transparency, and protection for investors.
In total, 84,202 investor claims have been addressed since the start of the bailout program, with 69,445 claims (approximately 82%) fully settled. This additional GHC1.5 billion is expected to further ease the financial burden on affected investors, especially those who have accepted the government’s bailout package.
The SEC described the decision as driven by humanitarian considerations and intended to bring much-needed financial relief to investors who have endured significant losses due to the failures of the fund management companies. Under this new release, investors will receive either a minimum of GHC50,000 or 15% of their outstanding examined claims, whichever is higher.
With this top-up, close to 91% of affected investors are expected to have their claims fully settled. The funds will be managed through the Special Purpose Vehicle, Amalgamated Mutual Fund (AM Fund), under the supervision of GCB Capital Ltd.
A meeting will soon be held by AM Fund managers to guide investors on how to access their funds and explore prospects for leaving their claims in the AM Fund for future management.
Three unions in Ghana have announced plans to initiate industrial action on August 9, 2024, if the Ministry of Finance does not authorize the payment of agreed allowances by August 8, 2024.
The unions involved are the Senior Staff Association-Universities of Ghana (SSA-UoG), the Federation of Senior Staff Associations of Ghana (FUSSAG), and the Teachers and Educational Workers Union of the Trade Union Congress (TEWU-TUC).
The unions are concerned about the Ministry’s failure to issue a letter authorizing the payment of the Vehicle Maintenance Allowance (VMA) and other related allowances.
They have given the Ministry a deadline of August 8 to release the necessary letter, warning that failure to do so will result in industrial action the following day.
In a statement dated August 5, the unions emphasized their commitment to fighting for their members’ rights and expressed frustration over the Ministry’s refusal to engage with them despite multiple attempts.
They noted that while universities receiving government subventions have been paid, including arrears, those on the Controller and Accountant General’s payroll have not received the new rates.
The Ghana Tertiary Education Commission (GTEC) has reportedly halted the payment of the new rate by universities, pending authorization from the Ministry.
This has led to concerns that even those currently receiving the new rate may be denied it, while others remain on the old rate.
The unions accuse the government of using underhanded tactics to deny them the agreed allowances and are determined to take action if their demands are not met.
“Now the Ghana Tertiary Education Commission is ordering the universities not to pay the new rate until a letter from the Ministry authorizing the payment is released. In that case, even those who are receiving the new rate are going to be denied the new rate while those who are on the Controller payroll still remain where they are.
“The Unions believe that the government is using Machiavellian tactics to deny us of an agreement reached with them.”
Ministry of Finance has sadly announced thepassing of Dr. John Kumah, who served as a Deputy Finance Minister.
In a post on their X platform on Thursday, the Ministry said, “With heavy hearts, we announce the passing of our Deputy Minister for Finance and MP for Ejisu Constituency, Dr. John Ampontuah Kumah. May he rest well in the Lord.”
President Nana Addo Dankwa Akufo-Addo expressed his condolences following the passing of Dr. John Kumah, highlighting the significant contributions made by the late Deputy Finance Minister to the government’s economic agenda.
Akufo-Addo credited Kumah for his instrumental role in advancing progress and ensuring the fair distribution of benefits across society.
Describing John Kumah as an outstanding Ghanaian patriot, President Akufo-Addo mourned the loss of the 45-year-old lawmaker for Ejisu, who leaves behind a wife and six children.
In a Facebook post, Mr Akufo-Addo said, “I am deeply saddened by the tragic news of the sudden death of the Deputy Minister for Finance and Member of Parliament for Ejisu, Hon. John Ampontuah Kumah, whose untimely passing has left us all bereft of a bright, energetic light in our midst.
“I knew him very well both in my days as Leader of the Opposition and as President of the Republic, and his warmth, humility, and genuine concern for others endeared him to me and to all who crossed his path. His unwavering dedication to service, his tireless commitment to the betterment of our nation, and his profound passion for uplifting the lives of the people of Ejisu and Ghana were evident to all who had the privilege of knowing him.
He was a stalwart of the New Patriotic Party in the Ejisu constituency, which he served with great enthusiasm and devotion as a Member of Parliament.
“He was the first Chief Executive Officer of the new entity I set up in my first term, the National Entrepreneurship and Innovation Programme (NEIP). He distinguished himself in that office and, therefore, merited his promotion to the office of Deputy Minister for Finance, where he brought not only expertise and skill but also a deep sense of compassion and empathy to his role.
His efforts were instrumental in advancing the government’s economic agenda and ensuring that the fruits of our progress were equitably shared among all segments of society. He was a Ghanaian patriot par excellence.
“To his wife, children, family and the New Patriotic Party in the Ejisu constituency and across the nation, I offer my deepest condolences. on their great loss. May God bless him and allow his soul to rest in perfect peace in His Bosom until the Last Day of the Resurrection when we shall all meet again.”
Recent media reports alleging that Finance Minister Ken Ofori-Atta misused GH¢77 million from the Contingency Vault for football, with ₵27.9 million allocated to the Black Stars, have been refuted by the Ministry of Finance.
In a statement issued by the Ministry, these claims were firmly rejected as inaccurate and baseless.
The report, which was attributed to MP Samuel Okudzeto Ablakwa, purportedly suggested that the Finance Minister established an unauthorized Contingency Vault in 2023 and accessed funds without parliamentary approval.
The Ministry clarified, stating, “These allegations are inaccurate and unfounded. It is incorrect to state that the Contingency Vault was illegally created by Ken Ofori-Atta in 2023.” It explained that the Contingency Vault is a routine part of the Appropriation Bill passed by Parliament annually, allowing the government to address unforeseen expenditure challenges during budget implementation.
The statement also emphasized the differences between the Contingency Fund and the Contingency Vault, emphasizing that the latter is used for unforeseen and urgent expenses, as demonstrated by the Covid-19 Pandemic, and requires parliamentary approval.
The Ministry emphasized, “For the avoidance of doubt and the education of the public, the Contingency Vote, unlike the Contingency Fund, does not require going back to Parliament for approval whenever there is a need to access it.” The clarification aimed to dispel any confusion and emphasized that the public finance architecture does not use the term “Contingency Vault.”
The Ministry of Finance has announced that it will hold upcoming, in-depth discussions with important stakeholders in response to Organised Labour‘s protests against the government’s plan to impose a Value Added Tax on home power consumption.
The aim is to address concerns and ensure stakeholder buy-in for a quick resolution.
The Finance Ministry urges restraint from Organised Labour, the Electricity Company of Ghana (ECG), and the Northern Electricity Distribution Company (NEDCO) to facilitate constructive dialogue.
Organised Labour has kicked against the government’s implementation of the VAT on electricity consumption by residential customers.
“The Ministry of Finance has noted the concerns of Organised Labour on the implementation of VAT on the consumption of electricity by residential customers. Extensive dialogue will be held with Organised Labour and other key stakeholders in the coming weeks, to ensure stakeholder buy-in,” the Ministry said in its statement.
The Finance Ministry appealed to Organised Labour, the Electricity Company of Ghana (ECG), and the Northern Electricity Distribution Company (NEDCO) to exercise restraint to “facilitate constructive dialogue towards a quick resolution of the impasse.”
“The Ministry therefore appeals to Organised Labour and all stakeholders, including ECG and NEDCO, to exercise restraint to facilitate a constructive dialogue towards a quick resolution of the impasse.”
In a letter dated January 1, Finance Minister, Ken Ofori-Atta, directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement the VAT, aiming to raise revenue for the COVID-19 recovery programme.
The Ministry of Finance has announced the successful acquisition of GH¢3.9 billion through its recently reopened domestic debt exchange initiative. The application window for this program closed on September 22, 2023.
In an official statement, the Ministry highlighted that these results mark a significant milestone for the government’s efforts to fully implement its COVID-19 economic growth program amid the current economic conditions.
The statement also clarified that no further submissions will be accepted, and no withdrawals or cancellations will be allowed.
“The settlement of the New Tranches pursuant to the Invitation to Exchange is scheduled for September 29, 2023, at which point the Government will issue the New Tranches to Eligible Holders whose offers have been accepted, crediting their accounts at the CSD,” the statement concluded.”
Below is the full statement:
THE GOVERNMENT ANNOUNCES RESULTS OF THE REOPENING OF THE DOMESTIC DEBT EXCHANGE
The Government announces today the results of the reopening of its domestic debt exchange which closed at 4:00 p.m. on 22nd September 2023. Holders eligible to participate in the reopening (as determined by the Central Securities Depository) tendered an aggregate amount of GHS3,990,828,533 of outstanding Eligible Bonds. Capitalised terms used but not defined herein have the meaning ascribed to such terms in the Exchange Memorandum (as amended from time to time) available at https://projects.morrowsodali.com/GhanaDDE and https://mofep.gov.gh/news-and-events/debt-operations.
2. The Government deeply expresses its appreciation to bondholders and key stakeholders for their immense support of the Domestic Debt Exchange Programme (DDEP), the results of which constitute a significant achievement for the Government to implement fully the economic strategies in the post-COVID-19 Programme for Economic Growth (PC-PEG) during this current economic crisis.
3. Attached overleaf as an Appendix Table presents the details regarding the results of the reopening of the domestic debt exchange.
4. As the Invitation Period has expired, no new tenders will be accepted, and no revocations or withdrawals are permitted. For more details on these procedures, please refer to the Exchange Memorandum or contact the Central Securities Depository (CSD) at the contact information below.
5. The settlement of the New Tranches pursuant to the Invitation to Exchange is expected to occur on 29th September 2023, when the Government will issue the New Tranches to Eligible Holders whose offers have been accepted for credit to the account of such tendering Eligible Holder at the CSD.
The Government reserves the right to extend such settlement date (including with respect to one or more series of Eligible Bonds). END
ISSUED BY THE PUBLIC RELATIONS UNIT MINISTRY OF FINANCE
Holders of Treasury Bills (T-bills) have been reassured by Minister of State for Finance and Economic Planning Dr. Mohammed Amin Adam that their investments won’t be impacted by the debt restructuring plan described in the 2023 budget.
Dr. Amin claims that the government is attempting to put policies into place that would stabilize the economy while protecting the interests of T-bill holders who are already dealing with higher living expenses as a result of the COVID-19 outbreak and the Russia-Ukraine War’s knock-on consequences.
T-bills are not covered by the debt restructuring program, according to Dr. Amin Adam, who made this clear in an interview with Joy News’ PM Express on August 24, 2023.
“Allow me to reiterate that the government remains resolute in its decision not to restructure treasury bills. Treasury bills have been, and will continue to serve as, a dependable source of revenue for the government, supplementing the other revenue streams in place. It is crucial for individuals to remain assured that the government is maintaining its steadfast commitment to this established stance,” he said.
He emphasized that Treasury bills have long been a trusted investment option for both individuals and institutions. This is why the government is fully committed to ensuring the security of these investments, even in the context of broader economic initiatives.
This assurance aligns with Finance Minister Ken Ofori-Atta’s previous statement in January, where he unequivocally stated that “treasury bills will always remain sacred.”
The comments made by Dr. Amin Adam and the commitment expressed by Ken Ofori-Atta collectively underscore the government’s dedication to safeguarding the stability of T-bill holdings and upholding the confidence of T-bill investors.
In the meantime, the government has successfully fulfilled the initial coupon payment obligations for bonds affected by the Debt and Deficit Management Programme (DDEP). The Ministry of Finance, in an official statement, highlighted that as per the terms of the DDEP, which was launched on December 5, 2022, to complement the government’s fiscal agenda, the first coupon payments for the tendered bonds were due on August 22, 2023.
In accordance with this commitment, the government has fully honored its obligations by making the entire first coupon payment associated with the DDEP, amounting to GH¢2,369,667,190.18.
Furthermore, the Finance Ministry pointed out that the newly issued bonds under the DDEP have now become prominent instruments within the domestic bond market. This settlement of coupons establishes a strong foundation for a rapid economic recovery and underscores the government’s unwavering determination to fulfill all future payment commitments while strictly adhering to the new arrangements and terms.
The Ministry of Finance has revealed that the Actual Energy Sector Levies collected from January to December 2022 totalled GH¢6,703.30 million.
The ministry made this known in the 2022 Annual Report on the Management of the Energy Sector Levies and Accounts.
The revenue generated saw a decline from the total of GH¢7,281.70 million estimated as total Energy Sector Levies to be collected for the 2022 Fiscal Year.
This implies that the actual collection was below target by GH¢578.40 million or 7.9 percent, and according to the Ministry of Finance, this was mainly on “account of low consumption of petroleum products and unrealised power sales.”
The 2022 collections, however, recorded an increase of GH¢409.43 million (6.5 percent) above the 2021 collections of GH¢6,293.87 million due to an increase in the volume of petroleum products lifted compared to the 2021 volumes.
Meanwhile, total lodgement into the established and other accounts under the ESLA amounted to GH¢6,429.59 million, out of the collections of GH¢6,703.30 million.
The lodgement was below collections by GH¢273.71 million, representing 4.1 percent, on account of retention on the Road Fund and Energy Fund Levies by GRA, unpaid invoices by OMCs, and the inability of the EDCs to transfer PLL and NESL collections to the Ministry of Energy.
A total of GH¢5,804.60 million of total levies lodged into the ESLA accounts was utilised at the end of December 2022. The amount was utilised mainly to pay for power utility debts, effect transfer to E.S.L.A. PLC to settle coupon payments to bondholders, provide subsidy for Premix Fuel and RFO, provide funding for public lighting infrastructure and power consumed by public lighting, support road maintenance and the activities of the Energy Commission, as well as to support the National Electrification Programme.
A total of GH¢8,076.52 million is programmed to be collected in 2023 in respect of the ESLA. The estimated collection for 2023 represents 10.9 percent increase in collections compared to the 2022 programmed collections of GH¢7,281.70 million, and 20.5 percent increase over the actual 2022collections of GH¢6,703.30 million.
According to the report, the outlook for the levies remains positive with projections showing significant growth over the medium-term. Amounts of GH¢9,644.94 million, GH¢11,249.96 million, and GH¢13,098.72 million are estimated for collection in 2024, 2025, and 2026, respectively.
The 2022 Annual Report is prepared in accordance with the provisions of Section 6 of the Energy Sector Levies Act (ESLA), 2015 (Act 899).
Background
The Energy Sector Levies Act, 2015 (Act 899) as amended, was established to: i. consolidate existing energy sector levies to promote prudent and efficient utilisation of proceeds generated from the levies; ii. impose a Price Stabilisation and Recovery Levy; iii. facilitate sustainable long-term investments in the energy sector; and iv. provide for related matters.
The levies were reviewed and subsequently amended in 2017, 2019, and 2021. In 2017, the Public Lighting and National Electrification Scheme Levies were amended and reduced from 5.0 percent per kWh to 3.0 percent and 2.0 percent, respectively.
The objective of the amendment was to reduce the burden of payment of electricity bills, reduce incidence of illegal connections, and ensure more affordable electricity for Ghanaians.
In 2019, the Energy Debt Recovery Levy (EDRL), Road Fund, and Price Stabilisation and Recovery Levy (PSRL) were revised upwards to correct for the loss in value due to currency depreciation and inflation over the years without a commensurate increase in the fixed specific-type levies in the Price Build-up.
The 2021 amendment introduced the Energy Sector Recovery Levy (ESRL) or Delta Fund Levy, and the Sanitation and Pollution Levy (SPL).
The Pensioner Bondholders Forum has vowed to re-picket the Ministry of Finance to further hammer home its demand for the payment of all coupons and principal that are past due as well as an end to payment delays.
This follows what it describes as the government failure to pay outstanding coupons to it members, as promised.
In a statement, it said “we wish to state however, that if our requests are not met by 29th May 2023, we shall be left with no other option than to resume picketing the Ministry to further press home our demand for the payment of all coupons and principals in arrears”.
It furthered that “in our letter of May 15, 2023 to the Ministry to confirm the suspension [picketing], we requested that the Ministry starts immediate engagement with us and reach an agreement on the payment of all outstanding principals very quickly, and in any case not later than 19th May 2023. We made it clear that should the Ministry renege on any of the agreed points, we shall resume picketing the Ministry”.
Additionally, it said “we wish to put on record that the Ministry has not carried out fully what we had accepted, which is that: (i). the Ministry gave instruction for the payment of outstanding coupons up to 8th May 2023, and left out the coupons due on 15th May 2023; (ii). We have not received any indication of the payment of a coupon due today, 22nd May 2023; and (iii). The Ministry has failed/refused to meet and reach an agreement with us on the payment of all outstanding principals to pensioners”.
Consequently, the Forum pointed out that it has requested the Ministry to ensure the immediate payment of the outstanding coupons due on May 15 and 22, 2023, adding, it want an immediate engagement with the Finance Ministry to reach an agreement on the payment of all outstanding principals.
“We believe we have shown much goodwill to the Ministry and trust that the Ministry will reciprocate by working on our requests without any delay”, it concluded.
Thepensioners bondholders have vowed to picket again should government fail to pay outstanding coupons by April 28, 2023 as promised by goverment.
The forum in a statement signed by its Convener, Dr. Adu Anane Antwiexpressed disappointment over the government’s inconsistency regarding assurances to pay all pensioners their outstanding coupons and principals of bond investments.
The Convener of the Forum expressed the pain and financial hardships members have had to go through as a result of the delay and requested that the payments be made as demanded in the Forum’s letter of March 30, 2023, to the Finance Minister, Ken Ofori-Atta.
“We wish to state that we have granted the Ministry a one-week extension to the 21st of April 2023 deadline in our letter of 30th March 2023 for the payment of all outstanding coupons and principles, bringing the deadline now to 28th April 2023.”
“We wish to state finally that if the payments of all outstanding coupons and principals are not made by April 28, 2023, we shall be left with no other option than to resume our picketing at the premises of the Ministry to further press home our demand for the payment of all coupons and principals in arrears, and an end to payment delays.”
The Pensioners also commented on a press release from the Ministry of Finance dated April 14, 2023, that suggested that the leadership of Coalition of Individual Bondholders groups and the Pensioners Bondholders Forum agreed that the Joint Technical Committee constituted on January 18, 2023, reconvenes and agrees on a pathway, towards the settlement of the outstanding debt obligations by April 28, 2023.
The Pensioners said no such agreement was reached.
The Deputy Head of the Other Financial Institution Provision Department and an Assistant Director at the Bank of Ghana, Patience Yeboah-Nkansah, is advising all non-bank financial institutions to adhere to the rules of providing their quarterly reports on their operations to theBank of Ghana (BoG).
According to her, the feedback that will be provided by the non-bank financial institutions will enable the Central Bank to report to the board, its development partners and the Ministry of Finance (MoH).
She explained that the submission of the quarterly report will help the Central Bank to come out with policies to better serve the interest of the customers and the operators of the non-bank financial institutions.
She said non-bank financial institutions are not banks so they must operate in their remit and not set out to operate as banks.
She appealed to operators to abide by the laws governing their operations because the BoG would deal with them if they fall foul of the law.
She appealed to the non-banks, for that matter, microfinance operators to do responsible lending.
Madam Yeboah Nkansah issued this warning speaking in an interview at the Microfinance Forum organised by Ghana Microfinance Institutions Network (GHAMFIN) on the theme: ‘Building Resilient and Sustainable Non-Bank Financial Institution’s Sector in the Wake of Current Economic Challenges’.
On his part, Mr Yaw Gyamfi, the Executive Director of GHAMFIN, said the submission of returns has been a challenge to operators.
According to him, some operators have low capital so they shy away from submitting quarterly returns.
He warned that having low capital and failing to submit returns and paying a penalty of GHS12,000 is like using your capital to pay the penalty.
It is on this score, he urged members to adhere to the submission of the returns to avoid infractions.
The Coalition of Individual Bondholder Groups is giving the Ministry of Finance a 48-hour ultimatum to pay all matured principal and outstanding coupons due on the existing bonds issued by the Government of Ghana.
This follows the expiration of the deadline by the government to honour its debt obligation.
In a statement signed by Dr. Joel Djangma Akwetey and Senyo Hosi, the coalition called on the Securities and Exchange Commission and the Ghana Stock Exchange to enforce the rules of full disclosure required by all issuers including the Government of Ghana.
“We are giving a 48-hour ultimatum to the Ministry of Finance to honour its word to pay all matured principal and outstanding coupons due on the existing bonds issued by the Government of Ghana. We call on the Securities and Exchange Commission and the Ghana Stock Exchange to enforce the rules of full disclosure required by all issuers including the Government of Ghana”.
It pledged to fight to ensure the full payment of investors’ monies and the preservation of the securities markets for the future generation.
The Finance Ministry in February promised to pay all bondholders who opted out of the Voluntary Domestic Debt Exchange programme their coupons and principals March 13, 2023, but that has not been the case.
Finance Minister’s posture
The coalition described as unfortunate, the disregard by the Finance Minister, Ken Ofori-Atta, of all the basic rules that have been established to protect the integrity of the local markets and maintain sovereign credibility for Ghana.
“At the close of business on March 13, 2023, the Ministry of Finance, led by Ken Ofori-Atta, has disregarded all the basic rules that have been established to protect the integrity of the local markets and maintain sovereign credibility for Ghana. It is most unfortunate that the Ministry continues to have absolute disregard for its creditors, in this case individual bondholders, despite prior meetings held in which we stated the need for communication.”
“The coupon and principal payments due to Individual Bondholders who opted out of the Voluntary Domestic Debt Exchange programme have not been paid, despite written press releases confirming the resumption of payments on March 13, 2023, it added.
It also expressed worry about the loud silence of the SEC – charged with the mandate to protect investors and market integrity.
“The umbrella regulator of the Securities markets – Securities and Exchange Commission (SEC), Ghana – charged with a mandate to protect investors and market integrity have also maintained a loud silence throughout this period on the plight of Individual Bondholders. The Ghana Fixed Income Market of the Ghana Stock Exchange, where the old Government of Ghana bonds are listed and traded have also not enforced its basic rules of disclosure required by issuers. More loud silence.”
Market confidence waning
Furthermore, it warned of the fading away of the little confidence remaining in the market.
“The little confidence remaining in the markets as a result of assurances from the Ministry of Finance is fading away under the full watch of the very institutions set up to protect”.
It promised to fight till payments are done.
“Individual Bondholders, as was the case in the aftermath of the DDEP announcement, have been left to fight for themselves as the Government creates a full default on its obligations. Fight we will”.
The government has raised more than GH¢4.5 billion from the sale of short-dated securities at the lowest rate since June 2022.
It resold the 91-, 182- and 354-day bills on Tuesday at a benchmark rate of 24.16 per cent, significantly lower than the earlier offer rate of 35 per cent that was rejected last Friday.
The Ministry of Finance had earlier declined offers from dealers at 35 per cent, insisting that the market was ripe for lower rates after the successful conclusion of the domestic debt exchange programme (DDEP).
The low rates during Tuesday’s re-auction motivated the government to accept bids in excess of its targeted amount of GH¢2.77 billion.
The results of the auction published Wednesday showed that bids totaled GH¢6.151 billion but the government accepted GH¢4.5 billion.
While the 91-day bills were sold at 24.1610 per cent, the 182-day and the 254-day instruments were sold at 26.5564 per cent and 27.544 per cent respectively.
All rates are now the lowest since June when rates climbed up to 25 per cent and continued the upward surge to a peak of 36 per cent last month.
Reports indicate that the Ministry of Finance is working at resetting the rates to align with lower rates achieved in the long-dated horizon as a result of the DDEP.
The programme saw the swapping of about GH¢87 billion of high cost, shorter-dated bonds for low cost, longer-dated ones.
A number of factors could lead to another downgrade of the nation’s credit ratings, according to credit evaluator Fitch Ratings, including failing to honor interest and principal payments on maturing bonds to holders who opted out of the debt exchange during the grace period.
This, Fitch says, could result in a prolonged long-term (LT) local currency (LC) Issuer Default Rating (IDR) in the Restricted Default (RD) status.
This comes as government missed a principal payment on February 6, 2023 valued at GH¢4.2trillion. According to Fitch, it failed to clarify when holders who opted out of the protracted domestic debt exchange will receive payments.
In the second amended and restated exchange memorandum released on February 7, 2023, fiscal authorities announced that eligible holders of this bond will not receive a final interest payment and a final principal payment – regardless of whether an eligible holder had tendered their instruments or not.
In its recent rating of the country, the ratings agency downgraded the nation’s LT LC IDR to RD from a previous ‘C’ rating.
“The rating will be based on a forward-looking assessment of Ghana’s willingness and capacity to honour its local currency debt,” Fitch added.
Meanwhile, in a press release issued on February 14, 2023 the Ministry of Finance announced that coupon payments and maturing principals will be honoured “in line with government fiscal commitments”.
This announcement, according to Fitch, however does not yet clarify when the payments will be made to holders who opted out of the programme.
“In particular, it does not clarify whether a principal payment will be made before expiration of the grace period for this specific issue. This security is one of the six issues that have been downgraded to ‘D’,” Fitch explained.
Investors are closely watching the evolution of the country’s debt situation as well as government’s ability to honour payments and its potential impact on the credit rating. Already, the country has lost access to international markets on the back of higher borrowing costs.
Foreign debt concerns
Failure to make scheduled coupon or maturity payments on the country’s foreign-currency bonds within the grace period could result in a ‘RD’ status, Fitch said.
“Failure to make scheduled coupon or maturity payments on Ghana’s foreign-currency bonds within the grace period could lead to a downgrade of Ghana’s LT FC IDR to ‘RD’,” warned Fitch Ratings, adding that Ghana’s partially-guaranteed notes could also face downgrades depending on progress of the debt restructuring.
The warning comes amid a challenging economic environment, as the country races against time to get a much-needed International Monetary Fund (IMF) US$3billion bailout.
Fitch mentioned that once Ghana reaches an agreement with private creditors on the restructuring of its foreign currency-denominated debt and completes that restructuring process following the Common Framework official creditors’ claims treatment, it will assign a Long-Term Foreign-Currency Issuer Default Rating based on a “forward-looking assessment of its willingness and capacity to honour its foreign-currency debt”.
Meanwhile, evidence that the partially-guaranteed notes will be excluded from the external debt restructuring could lead to an upgrade of the issue rating on the partially-guaranteed notes.
However, the debt exchange has allowed the fiscal authorities to reduce interest payments by 1.5 to 2 percentage points of Gross Domestic Product (GDP) in 2023, assuming the 85 percent participation rate is equally distributed among eligible bonds and eligible bondholders.
The outstanding principal of eligible bonds amounts to GH¢132.4billion, approximately 22 percent of the 2022 estimated GDP.
Lawyer Kofi Bentil has described the current economic malaise Ghana is suffering as “the worst economic catastrophe of our lifetimes.”
He believes that the president needs to act decisively on same by making radical changes especially at the Ministry of Finance, where he wants all the political leadership led by minister Ken Ofori-Atta removed.
Bentil in a February 10, 2023 post on Facebook lamented the fact that President Nana Addo Dankwa Akufo-Addo’s posturing on the economy signalled that he was not taking the economic downturn seriously.
He also advanced the view that Vice President Mahamudu Bawumia in his capacity as the head of the Economic Management Team be seconded to take charge of the ministry and by that talks with the International Monetary Fund (IMF).
“Appoint the VP and head of EMT to take direct charge of the ministry of Finance and lead the efforts with the IMF and the Bond holders etc.” his post read in part.
He averred that the removal of “political leadership of the Ministry of Finance” should be on condition that all relieved appointees “continue to work behind the scenes to help resolve the mess they created.”
Ghana is currently hoping to secure an IMF bailout to help save the economy from collapse amid rising inflation, rapid depreciation of the cedi against the US dollar and credit downgrades by international rating agencies.
Government only recently concluded subscription of a Domestic Debt Exchange Programme (DDEP) which saw an 85% official subscription rate.
The DDEP is said to be a core condition that could help Ghana get approval of the IMF board after a Staff-Level Agreement was reached last December.
Minister Ofori-Atta is due to appear before Parliament to give answers to lawmakers on the DDEP.
Read Kofi Bentil’s full post:
Mr President,
If it’s serious, treat it like it is!!
You have changed nothing in the economic leadership of Ghana despite the worst economic catastrophe in our lifetimes!! It reflects very poorly on you.
Please consider this to show seriousness.
1. Appoint the VP and head of EMT to take direct charge of the ministry of Finance and lead the efforts with the IMF and the Bond holders etc.
2. Remove the whole political leadership of the Ministry of Finance but let them continue to work behind the scenes to help resolve the mess they created.
If it’s serious l, treat it like it is!!! The same thinking which created the problem won’t solve it!!!
Their holdings will not be converted into new bonds for settlement in line with the debt programme meant to tidy up the country’s debt stock and earn it a US$3 billion support from the International Monetary Fund (IMF).
The abstainers include the pensioner bondholders which have been protesting their inclusion in the programme.
In the statement released Tuesday, February 14, the Ministry of Finance said of the GH¢97.75 billion outstanding principal, GH¢84.99 billion was voluntarily tendered by investors that opted to participate in the programme.
It said the subscription rate was equivalent to about 85 per cent.
“The government is pleased with the results, as a substantial majority of the eligible holders have tendered,” the statement, signed by the Minister of Finance, Ken Ofori-Atta, said.
“This result is a significant achievement for the government to implement fully, the economic strategies in the post-COVID-19 Programme for Economic Growth (PC-PEG) during this current economic crisis,” the statement added.
Ghana needs an IMF programme to reorganise it finances, regain market access and confidence for rising inflation and the falling cedi to stabilise.
Sophia Akuffo, the recently-retired Chief Justice of Ghana, has joined the pensioners picketing in Accra at the Ministry of Finance.
The pensioners have been picketing at the premises of the ministry since Monday, February 6, 2023, over the government’s plan to involve their bonds in the Domestic Debt Exchange programme.
Captured in a front-seat position at the premises of the Ministry of Finance, the former Chief Justice has in hand a wooden placard.
Her placard read: “We use our bond yields to pay our: rents, medical bills, electricity, water bills.”
This was announced by the Ministry of Finance in a press release that began: “The Government of Ghana welcomes all bondholders who have so far tendered their bonds in conjunction with the current Domestic Debt Exchange Programme (DDEP).
“However, it has come to the attention of Government that some bondholders faced technical glitches as they tried to complete the online tender process.”
The statement read further: “Government is providing bondholders with a window to complete processes for tendering their bonds, in response to the terms of Exchange as amended pursuant to the 2nd Amended and Restated Exchange Memorandum. This window ends on Friday, 10th February 2023 at 4:00 p.m. (GMT).”
The release dated February 7 was signed b Finance Minister Ken Ofori-Atta.
This becomes the fourth extension since the first announcement was made in December 2022.
“The timetable of the Exchange is not otherwise affected by this, except for the Announcement Date which is now expected to occur on Monday, 13th February 2023.
“The settlement of the Exchange is still scheduled for Tuesday, 14th February 2023. Except as set forth in this paragraph, the terms and conditions of the Exchange are not modified or amended.”
The DDEP is part of conditionalities by government to access an International Monetary Fund bailout. The government is aiming to achieve IMF Board approval by March after sealing a Staff-Level Agreement in December 2022.
Here are the 3 times government extended its DDEP and why
First announcement of the DDEP programme
The Minister of Finance, Ken Ofori-Atta, in a 4-minute address on Sunday, December 4, 2022, announced a number of measures under the government’s Domestic Debt Exchange (DDE) programme.
This announcement was in line with the government’s debt sustainability analysis, as contained in the 2023 budget he presented to Parliament on November 24, and it gave entities up to December 30, 2022, to indicate their participation in the programme.
The minister laid out, among other things, the exchange of existing domestic bonds with four new ones, as well as their maturity dates and terms of coupon payments.
Under this initial offer, for bondholders with bonds maturing in 2023, the government promised four new bonds that were expected to mature in 2027, 2029, 2032, and 2037, and 0% interest in 2023, 5% interest in 2024, and 10% interest in 2025, which will continue till the maturity of your bond.
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 not individual bondholders.
First extension from December 30, 2022, to January 16, 2023
After fierce resistance from trade unions about the inclusion of pension funds in the DDEP and the lack of enough voluntary participation, the government announced the extension of the voluntary participation in the programme to January 16 with the following modifications:
• Offering accrued and unpaid interest on Eligible Bonds and a cash tender fee payment to holders of Eligible Bonds maturing in 2023;
• Increasing the New Bonds offered by adding eight new instruments to the composition of the New Bonds, for a total of 12 New Bonds, one maturing each year starting January 2027 and ending January 2038;
• Modifying the Exchange Consideration Ratios for each New Bond. The exchange consideration ratio applicable to Eligible Bonds maturing in 2023 will be different from other Eligible Bonds;
• Setting a non-binding target minimum level of overall participation of 80% of the aggregate principal amount outstanding of eligible bonds; and
• Expanding the types of investors that can participate in the exchange to now include individual investors
Second deadline extension from January 16, 2023 to January 31, 2023:
The government on Monday, January 16, extended the deadline for DDEP to Tuesday, January 31, 2023, after resistance by some of the stakeholders involved in the programme, particularly individual investors whom the government promised not to include in the programme.
A press release on the development, issued by the Public Relations Unit of the Finance Ministry, announced some modifications by the government on the invitation to the exchange, including;
Offering accrued and unpaid interest on Eligible Bonds and a cash tender fee payment to holders of Eligible Bonds maturing in 2023;
Increasing the New Bonds offered by adding eight new instruments to the composition of the New Bonds, for a total of 12 New Bonds, one maturing each year starting January 2027 and ending January 2038;
Modifying the exchange consideration ratios for each New Bond. The exchange consideration ratio applicable to Eligible Bonds maturing in 2023 will be different than for other Eligible Bonds;
Setting a non-binding target minimum level of overall participation of 80% of the aggregate principal amount outstanding of Eligible Bonds; and
Expanding the types of investors that can participate in the exchange to now include individual investors.
Extension of deadline from January 31, 2023 to February 14, 2023
The government had to once again extend the deadline for voluntary participation in the DDEP to February 14, 2023, from January 31, 2023, citing its latest offer to individual bondholders.
Even though this time around a lot of groups, including banks, have agreed to participate in the programme, the government still wants to include individual bondholders.
The latest offer includes the exchange of instruments with a maximum maturity of 5 years instead of 15 years and a 10% coupon rate to individual bondholders below the age of 59 to encourage them to participate in the DDEP.
Additionally, all retirees (including those retiring in 2023) will be offered instruments with a maximum maturity of 5 years instead of 15 years and a 15% coupon rate.
The current deal has, however, been rejected by individual bondholders. The individual bondholders, who are pensioners, picketed at the Ministry of Finance on Monday, February 6, 2023, to demand that the government exclude them from the DDEP.
A petition to keep them out of the program and secure their pensions was addressed to the finance minister, according to the forum, which was run by Dr. Adu A. Antwi, but all attempts to get in touch with him have been futile.
He claims that the ministry is coming together to express their discontent with being included in the debt exchange program.
He noted that the pensioners still maintain their stance on their exclusion from the programme despite the deadline of January 16, 2023.
Meanwhile, the deadline has been extended by the governemnt to January 31, 2023 for broader stakeholder consensus to be made.
On January 16, 2023, the finance minister announced, “Building consensus is key to a successful economic recovery for Ghana. Pending further stakeholder engagement with institutional and individual investors recently invited to join the debt exchange programme, the government is extending the DDE expiration to Jan 31, 2023.”
The government announced the inclusion of individual bondholders in the debt exchange programme. But the bondholders have noted that this will not be in their best interest and may lead to a depletion of their investments.
Pensioner Bondholders to converge at Ministry of Finance on January 23
This could cause some banks to have significant capital deficits, but we anticipate that regulatory forbearance would lessen the effect and allow banks to continue complying with minimum capital requirements. Despite regulatory forbearance, the two Ghanaian banks that Fitch rates should be able to sustain the LC debt exchange thanks to significant capital buffers.
The LC debt exchange, launched on 5 December, comes alongside Ghana’s efforts to secure IMF support. Fitch views it as a distressed debt exchange and downgraded Ghana’s Long-Term Local-Currency Issuer Default Rating (IDR) to ‘C’ from ‘CC’ as a result.
Ghana’s Ministry of Finance has stated that the debt exchange is voluntary but we expect banks to participate, particularly as the risk-weighting for the old bonds will be increased to 100% from 0%, and non-participating banks will not be eligible for liquidity support from Ghana’s newly created financial stability fund. Treasury Bills, which account for about 15% of the banking system’s securities according to Bank of Ghana data, are excluded from the restructuring.
Based on the coupon rates and tenors of the new bonds, and assuming a 20% discount rate, we estimate that banks exchanging old LC government bonds will suffer a net present value loss of about 50%. This would significantly erode banking system capitalisation. However, we expect the authorities to allow flexible accounting treatment to significantly reduce losses, and to ease regulatory capital requirements so that banks can still meet minimum capital ratios.
Holders of LC government bonds were originally given until 19 December to formally respond to the exchange invitation but the deadline has been extended to 30 December. Fitch believes there is much opposition to the terms of the exchange, which raises the prospect of a further extension of the deadline and potentially a relaxation of the terms, reducing the losses imposed on creditors.
On 20 December, the government announced plans to restructure its external sovereign debt, which will add to the pressure on banks’ capital. Details have yet to be announced but payments on selected external debt, including Eurobonds, commercial term loans, and most bilateral debt, have been suspended.
Fitch views this as the beginning of a sovereign default process and downgraded Ghana’s Long-Term Foreign-Currency IDR to ‘C’ from ‘CC’ accordingly.
Fitch rates two Nigerian-owned banks in Ghana: Guaranty Trust Bank (Ghana) Limited and United Bank for Africa (Ghana) Limited, both with a Long-Term IDR of ‘B-’/Stable and a Viability Rating (VR) of ‘ccc’.
Taking account of these banks’ sovereign debt portfolio compositions, ample capital buffers and good headroom on other rating factors, we believe their VRs should be able to withstand both the LC and foreign-currency debt restructure, in addition to impending asset quality deterioration due to the effects of severe currency depreciation, extremely high inflation and large interest rate rises.
The two banks’ Long-Term IDRs are driven by our view that support from the banks’ Nigeria-based parents is likely to be provided, if needed. We do not expect Ghana’s debt restructure to affect the owners’ stance in this respect.
Foreign-owned banks, which account for about half of banking system assets in Ghana, may be better-placed than domestic banks to navigate the highly stressed operating conditions due to parental capital support.
Although the primary cause of the high pricing was primarily the recent devaluation of the Cedi, the PSGH noted that drug prices were still high despite the Cedi’s appreciation in a statement.
The PSGH wants to emphasize that the pharmaceutical industry also offers a significant, maybe life-saving, societal benefit.
The statement called on PSGH actors of the pharmaceutical supply chain, including manufacturers, importers, wholesalers, suppliers, and retailers to take urgent steps to reduce the prices of medicines to reflect Cedi’s improved performance against the major trading currencies.
The PSGH also urged the National Health Insurance Authority (NHIA), the Ministry of Health (MOH), and the Ministry of Finance (MOF) to urgently work together to ensure payment of arrears owed to providers under the National Health Insurance Scheme (NHIS).
This it said would allow providers to pay their suppliers of pharmaceutical products.
“We believe this will also contribute further to the reduction in prices of medicines,” it said.
The Ministry of Finance has extended the Domestic Debt Exchange Program (DDEPexpiration )’s date from Monday, December 19 to December 30 of this year, with a Friday, January 6, 2023 settlement date planned.
The ministry believes that this development will give the required time to conduct the required consultations and analyses to meet the demands of domestic and international institutional bondholders while maintaining the integrity of the Debt Sustainability Analysis and the Staff-Level Agreement (SLA).
“Over the last 10 days, we continued the consultation efforts that we initiated with all stakeholders ahead of the launching of the offer, including regulators, bankers, pension funds, asset managers and insurance companies.
“Complementing the efforts on the structure of the offer, we are working with the Bank of Ghana and other regulators (SEC, NPRA and NIC) in the financial sector and our advisors and including input from various institutions and the unions,” it said in a release.
The release said the ministry also fully considered feedback from the financial sector in relation to the need to secure internal and executive board approvals which were necessary considerations for their participation in the exchange.
“This in some instances may require emergency board meetings, etc. The extension also affords the Government of Ghana the opportunity to consider suggestions made by all stakeholders with the aim of adjusting certain measures acceptable within the constraints of the Debt Sustainability Analysis.
“Considering these developments and taking cognisance of the festive season, we have decided to extend the expiration date of the voluntary offer to Friday, December 30, 2022, with a contemplated settlement date of Friday, January 6, 2023,” it said.
The release further explained that the extension came on the heels of the announcement of an SLA with the IMF on December 13, 2022.
On December 6, 2022, the domestic debt operation, formally referred to as the Invitation to Exchange, was launched.
No takers
Almost two weeks after the launch of the programme, checks have revealed that there were no takers for the offer.
Sources said the Central Securities Depository (CSD) was waiting for the consent of institutional bondholders willing to participate in the DDEP that required them to postpone their interest in return for full payment of the principal at a later date.
As of Monday, December 12, no investor had communicated to the CSD of its intent to participate in the historic exercise.
Launched by the Minister of Finance, Ken Ofori-Atta, the DDEP requires institutional holders of the eligible bonds to agree in writing to the CSD to swap their current holdings for the new ones.
Interested investors had up to 4 p.m today, December 19, to confirm their willingness to participate, according to the Minister of Finance, who said the exercise was an avenue for Ghana to bring its debts to sustainable levels to be able to qualify for financial support from the International Monetary Fund (IMF).
The paper was also hinted by sources close to the transaction that it was possible that the banks and brokers, which interfaced for the depository and the investors, were collating the lists in bulk to be forwarded to the depository later.
Given that the CSD does not deal with individual investors, the sources said it was not unusual for the depository to record no takers for the debt exchange programme in the early days.
Agitations
Since the announcement of the programme, fund managers, labour unions and pensions fund managers among others have fiercely resisted the move, citing the threat it posed to pension funds in particular.
They also blamed the government for what they claimed to be an imposition of the programme without deep consultations to embrace their suggestions and views.
The groups strongly held the view that their suggestions could make the programme better and more appealing to the IMF and hasten the process towards reducing the country’s debt to sustainable levels.
It is not yet clear what the expiration of the deadline will mean for the entire government /IMF negotiation.
Presently, the government is racing against time to secure IMF management and board approvals to unlock some $3 billion in balance of payment support.
With the announcement of an SLA which seems to be a contributory factor to the appreciating cedi since last week, analysts are also wondering whether this can be sustained in view of the latest development.
The government has temporarily stopped paying a number of foreign obligations to organizations that have extended loans to the nation.
The category of debts includes dollar-denominated bonds issued on the international market (Eurobonds), the country’s commercial term loans and most of its bilateral debts and debts mostly granted by friendly countries to Ghana.
It is to enable the government to again restructure the varied Eurobonds and the commercial loans on the country’s books, including those of state-owned enterprises, to make them more orderly and their servicing sustainable.
A statement issued by the Ministry of Finance yesterday said holders of the affected debts would be engaged in due course in order to be presented with restructuring proposals for their consideration.
It, however, stressed that the suspension would not affect the repayment of multilateral debts — loans procured from large institutions that lend to countries, such as the World Bank and the International Monetary Fund (IMF), the African Development Bank (AfDB), the European Development Bank, the Organisation for Economic Cooperation and Development (OECD) and the United Nations Development Programme (UNDP).
It would also not affect all types of new debts contracted after yesterday or debts related to certain short-term trade facilities, it added.
“We are also evaluating certain specific debts related to projects with the highest socio-economic impact for Ghana which may have to be excluded.
“This suspension is an interim emergency measure, pending future agreements with all relevant creditors,” the statement explained.
Rationale
The suspension is to enable the government to restructure the external debts to make their servicing sustainable, while providing some leeway for government finances.
It is part of a raft of emergency measures to prevent a further deterioration in the economic, financial and social situation in the country.
Engagement
The statement added that the government was ready to engage in discussions with all its external creditors to make Ghana’s debt sustainable through a fair, transparent and comprehensive debt restructuring exercise, in line with international best practices.
“The Ministry of Finance will hold an investor presentation at a date to be announced at a later stage,” it said.
Receiving the buy-in of the country’s creditors is one of the cardinal conditions precedent to securing the approval of the management and the Executive Board of the IMF for Ghana’s extended credit facility programme with the fund.
The statement explained that the financial resources of the country, including the Bank of Ghana’s international reserves, were limited and needed to be preserved at this critical juncture.
Background
The government secured an IMF staff-level agreement on December 13, this year for a financing programme aimed at restoring macroeconomic stability and debt sustainability and preserving financial stability, while protecting the most vulnerable.
Prior to that, the Ministry of Finance had launched a Domestic Debt Exchange Programme and invited institutional domestic debt holders to voluntarily exchange them for four new bonds that would mature between 2027 and 2037.
While the principals of the domestic bonds would be paid in full on maturity, no coupon (interest) rate will apply or be paid next year, but five per cent would be paid on all four beginning 2024, up to 10 per cent in 2025 and until maturity.
By the last check last Monday, five days to the deadline for the voluntary submission of bonds, the Daily Graphic found out that no investor had taken the government’s offer, which was launched on Monday, December 5, this year.
At the launch of the debt exchange, the ministry had said details on the external debt would be announced later, the first of which is the suspension of servicing of selected debts.
Update
The objective of the debt restructuring is to reduce the country’s current debt burden and its servicing implications on the economy.
It is also to create a much more orderly, transparent, efficient and expedited manner critical to restoring macroeconomic stability and debt sustainability.
Providing updates on the economy yesterday, the Minister of Finance, Ken Ofori-Atta, said the government team had continued to dialogue extensively with various stakeholders, including regulators and representatives across the pension funds, banking, asset management and insurance sectors.
“We have discussed with them the rationale behind the domestic debt exchange programme, understood their perspectives and taken their feedback,” he said.
He said the staff-level agreement with the IMF had already started yielding results, shown through the cedi appreciation.
Mr Ofori-Atta urged Parliament to support the gains made with the passage of the Appropriations Bill for the 2023 fiscal year.
“We also urge Parliament to support in particular new revenue measures outlined in the 2023 budget which aim to improve revenue mobilisation. We cannot afford to repeat the mistakes of 2022,” he said.
According to the chamber, the proposal put forth by the Minister of Finance, Ken Ofori-Atta, is inferior to market expectation and will destroy the savings of Ghanaians and further undermine market confidence.
“We have carefully analysed the announcement by the Minister of Finance on the Debt Exchange Programme and are of the opinion that it is injurious to the interest of contributors to pension schemes”, it said in a statement.
“The proposal as put forth by the Minister of Finance is inferior to market expectation and will destroy the savings of Ghanaians and further undermine market confidence. This is why we reject it outright”, it explained.
It assured contributors to pension schemes that the industry has not agreed to the debt exchange programme proposed by the Ministry of Finance.
“As Trustees, we hold a fiduciary responsibility and are enjoined to seek the best interest of contributors at all times”, it stressed.
It further stated that though it recognises that inflation has caused significant harm to pension fund assets this year and that there is an urgent need to reduce the government debt burden and restore macroeconomic stability that should however not be done to the detriment of contributors to pension schemes.
“We share in Government’s call for burden sharing, but that should be done in the spirit of fairness to ensure a win-win outcome to all stakeholders”, the chamber added.
It urged contributors to pension funds and actors in the pensions industry to remain calm “as we seek the best outcome in our negotiations with the Ministry of Finance”.
“We will duly inform members of the outcome of our deliberations”, it concluded.
A whopping amount of GH419,079,716.75 was spent by the Ghana Scholarships Secretariat for foreign scholarships awarded.
The Secretariat awarded foreign scholarships to 1,797 students.
Per the 2023 budget statement presented to Parliament by Finance Minister, Ken Ofori-Atta, more than half the amount, GH¢340,301,673.50, was used to cover tuition fees for the 2020/2021 academic year.
Also, GH¢78,774,043.25 was paid as stipends for the first half of the year for all donor sponsored and some Government of Ghana sponsored students.
Under the District Level Decentralisation Scheme (DLDS), the Ghana Scholarships Secretariat made payment of tuition fees for continuing students in public universities with renewed scholarship awards, as well as fresh beneficiaries for the 2021/2022 academic year.
The Finance Ministry did not disclose the amount spent on local scholarships by the Secretariat.
However, the ministry disclosed that a total of 8,174 students benefited from the local scholarships.
In November this year, the Registrar of the Ghana Scholarship Secretariat, Dr. Kingsley Agyemang, stated that a total of GH₵50 million has been released to the Controller and Accountant General Department to pay scholarships.
He made this known to a delegation from the National Union of Ghana Students (NUGS), led by its president, Dennis Appiah Larbi-Ampofo, paid a courtesy call on the Secretariat at the end of October.
Government says it is yet to conclude technical works on the country’s possible debt operations following engagements with the International Monetary Fund (IMF).
The Ministry of Finance in a statement issued on Thursday, November 24, 2022, shortly after the presentation of the 2023 Budget by the sector minister emphasizes, “terms of principal payments and interest on the public debt are still being discussed”.
This clarification comes on the heels of some media reports suggesting that government intends to put interest payments for domestic bondholders on hold and rather introduce some haircuts on international bonds.
The widespread publications point to debt restructuring that will impose a 30 percent haircut on both the principal and interest of foreign bonds while individuals with local bonds will begin receiving interest in full from 2026 after receiving zero, five and 10 percent of interest in 2023, 2024 and 2025 respectively with the principal going untouched.
But the statement from the Finance Ministry maintains that, no such arrangements have been finalized because discussions are still being held.
“Details of the different layers of a debt operation, including the terms of principal payments and interest on the public debt are still being discussed, taking into account recipes of debt. Sustainability and International set practices”, the release read in parts.
“All measures will be communicated by the Ministry of Finance in due course”, it further continued.
Finance Minister, Ken Ofori-Atta during the presentation of government’s economic policy and budget statement for the next fiscal year beginning January 2023 told Parliament, government is considering a debt operation aimed at restoring the country’s debt sustainability and reducing pressures on the national budget.
This he said would also open up financing streams and provide needed balance of payment support from the IMF.
Currently, Ghana is at the doors of the International Monetary Fund institution seeking a US$ 3 billion bailout after a worsening economic situation and cost of living crisis.
Government says it has reached agreed programme objectives with the Fund for the support.
The move has raised issues of possible haircut on some investments as part of debt restructuring measures, despite assurances by President Akufo-Addo that government does not intend to slash the returns made on investments in its negotiations.
“Government of Ghana reiterates its commitment to rolling out a lasting solution to the current economic challenges with the ultimate goal of restoring macroeconomic stability and anchoring debt analysis”, the Finance Ministry concluded in its statement.
A Security and Foreign Policy Analyst, Adib Saani has said he has no confidence in the Office of the Special Prosecutor to do a good job in the investigation of corruption levelled against Charles Adu Boahen, the sacked Minister of State at the Ministry of Finance.
The Special Prosecutor on Tuesday announced that he had started a probe into allegations of corruption levelled against the former Minister.
This comes after the Secretary to the President, upon the directions of the President, referred to the Office of the Special Prosecutor for further investigations, allegations contained in an investigative exposé published by Anas Aremeyaw Anas’ Tiger Eye P.I. titled “Galamsey Economy”.
Charles Adu Boahen, Minister of State in charge of Finance at the Office of the President, captured in an undercover documentary, revealed to Tiger Eye that the Vice President, Dr Mahamudu Bawumia, needs just USD200,000 token as an appearance fee and some positions by an investor for the Vice President’s siblings to get his backing and influence in establishing a business in Ghana.
This revelation was made in a meeting with Tiger Eye investigators, who in an undercover investigation, posed as businessmen, in a hotel room in the United Arab Emirates. This was an investigation into top-level corruption that undermines investor confidence in Ghana.
But commenting further in an interview on Ghana Kasa show on Kasapa 102.5FM/Agoo TV, Adib Saani stated that the public should not expect anything progressive from the Office of the Special Prosecutor as it has not done much in the past to prove its efficiency.
“I have absolutely no trust in the Office of the Special Prosecutor. The number of cases that, that office is investigating and the way some of the matters have been treated leaves much to be desired. For instance, the Labianca case. You see, the Special Prosecutor’s Office is a political office and the same people who appointed the Special Prosecutor are the very people he will be investigating.
“So, you don’t expect anything progressive to come out of that Office’s investigations. Who has the Special Prosecutor’s Office successfully prosecuted? So, as for that office, to be honest, it’s not worth saying so much about it or attaching much seriousness to it,” Mr. Saani stated.
The identity of a civil servant who is currently a Principal Economics Officer at the Ministry of Finance (MoF), believed to be the first port of call for Tiger Eye P.I. investigators in their endeavour to secure contact with the Finance Minister, Ken Ofori-Atta and the then Deputy Minister for Finance, Charles Adu Boahen, has been revealed to Asaase News by a reliable source.
The civil servant, Solomon Amponsah, who works at the External Resource Mobilization and Economic Relation Division of the Ministry of Finance, is believed to have received a call from the late Ahmed Hussein-Suale, a Tiger Eye P.I. investigator, who suggested to Mr Amponsah to arrange a meeting between him (Ahmed Hussein-Suale), a Ghanaian Lawyer and the two Ministers of Finance in Dubai, towards a desire to open a bank in Ghana with about $500 million dollars.
Subsequently, the Ghanaian lawyer and Charles Adu-Boahen on the strength of the arrangement made by Solomon Amponsah, met with the undercover team posing as investors in a hotel suite in Dubai on 8 February, 2018, just 13 months after the Akufo-Addo administration assumed office.
After the meeting with Charles Adu Boahen, Tiger Eye’s next move was to meet the Finance Minister, Ken Ofori-Atta. Solomon Amponsah, came in handy again to continue with his arrangements towards a meeting between the Finance Minister and the Tiger Eye P.I. investigators who had posed as investors in Dubai.
They (Tiger P.I) were to have their chance, they thought, when after several attempts Mr Ofori-Atta agreed to meet them at the airport in Dubai on transit to Tokyo, Japan.
In the company of his then Personal Assistant (PA), Michael Bediako, Mr Ofori-Atta, met the supposed investors (investigators) at one of the terminal hotels at the Dubai International Airport hotel on Sunday 8 November 2018 at around 6:30am.
Mr Ofori-Atta according to the source, was informed the meeting was with the Chairman of Al Baraka Islamic Bank of Bahrain, whose interest was to invest $500m to set up an “ethical” bank in Ghana.
The meeting, per our checks, which had Mr Solomon Amponsah, and the Ghanaian lawyer present, lasted some five minutes. Ken Ofori-Atta, left very peeved when he was offered a “gift”, which he refused to accept, and walked out with his PA who was also offered a gift that was rejected as well.
It remains to be seen if these engagements with Solomon Amponsah were part of the Tiger Eye P.I. investigation and whether or not it will feature in future releases by Anas Aremeyaw Anas.
Wealthy polluter nations must pay up for climate-induced losses and damages suffered by most vulnerable and poor nations, Country Director of ActionAid Ghana John Nkaw has proposed.
Mr. Nkaw, who was addressing participants at the National Climate Change Seminar in Accra, said millions of farmers in vulnerable countries, including Ghana, are losing their investments due to alarming changes in the climate.
“These sad realities demand our collective action to prevent a further increase in the wealth gap. We must continue our campaign for the establishment of an international financing facility to help vulnerable countries recover and rebuild in the aftermath of climate disasters,” he indicated.
Indeed, Africa suffers most from the ongoing global climate crisis, though the continent is the least contributor to this phenomenon.
Africa only contributes about 3.8 percent of carbon emissions’ global volume, while the western world is responsible for 76 percent.
Since 1960, average annual mean temperature, according to the Ministry of Finance (MoF), has increased by one degree Celsius; with average number of hot days increasing by about 13 percent while the number of hot nights per year has increased by 20 percent.
In 2017 alone, the effects of climate change on agriculture and the environment, according to the MoF, was estimated at US$6.3billion.
A recent report by the African Development Bank states that the continent will need some US$3trillion for climate adaptation programmes by 2030, to enable African economies implement nationally determined contributions.
Already, a World Bank report on Ghana’s climate risk profile states that the country will continue to get warmer – with mean temperature projected to increase by 1°C to 3°C by mid-century, and by 2.3°C to 5.3°C by end of the century.
But Mr. Nkaw explained that regular and varied research on climate change is essential to enhancing stakeholders’ understanding of adaption and helping influence public and private actions to attract investment in vulnerable communities.
“The net effect of ongoing climate change is affecting agricultural production. These changes have impacted negatively on people already living in poverty, who have become vulnerable to prolonged droughts, floods among other climate-induced impacts,” he added.
Vice Chancellor of the University of Energy and Natural Resources, Professor Elvis Asare Bediako, spoke at the event and said the UENR is open to partnering with government and non-governmental institutions – including ActionAid, Care International, the World Bank and others – in the fight against climate change.
The conference’s theme, ‘Building Climate Resilience in Ghana Through Multi-stakeholder collaboration’, was meant to highlight the impact of climate change on smallholder farmers; engage government agencies; and disseminate research findings on Ghana’s climate change situation to influence policy.
The former Operations Manager of the Forestry Commission of Ghana, Charles Owusu, has taken a swipe at President Nana Addo Dankwa Akufo-Addo for his continuous praise of his ministerial appointees.
In a Peace FM interview monitored by GhanaWeb, Charles Owusu, questioned whether Akufo-Addo will continue to say that his ministers are performing excellently given the deteriorating economic condition in the country.
He berated the appointees of the president, particularly those at the Ministry of Finance and the Bank of Ghana for going quiet as the country suffers.
“This is why sometimes, some of us ask President Akufo-Addo whether he thinks after all the happenings in the economy, the performance of his ministers is beyond excellent.
“… the prices of all items are increasing in the country. It is true that we are facing hardship but the problem I have with the Nana Addo government is that after the president has addressed the nation, all the heads of the ministers, departments and agencies have gone silent and the president is been criticised for everything.
“The Ministry of Finance has two ministers and two deputies what are we hearing from them? Akufo-Addo is being blamed for everything and they are sitting in some corner doing nothing, all of them are silent. Because if the officials of the Bank of Ghana and the Ministry of Finance start engaging Ghanaians the Ghana Cedi will not be depreciating as it,” he said in Twi.
The Peasant Farmers Association of Ghana says a review of government’s flagship Planting for Food and Jobs (PFJ) is long overdue.
The Agric Minister recently revealed that government has so far spent GH¢2.6 billion on the program and touted the success of the program.
But that claim has been challenged as food inflation continues to soar, while government figures indicate 6.4 million Ghanaians are food insecure.
Speaking to Citi News, Head of Programmes and Advocacy for the Peasant Farmers Association of Ghana, Charles Nyaba believes the Finance Ministry finds the Planting for Food and Jobs unsustainable hence the need for a review.
“The intentions the Ministry of Food and Agriculture has for the Planting for Food and Jobs were not implemented by the Ministry of Finance. The Ministry did not release money for them.”
“Per our conversations with the policymakers in the Ministries, it suggests that the Planting for Food and Jobs is not sustainable, the budget does not support that. So it has to be reviewed in a way that the Ministry of Finance does not pump more money into it. We do not think it is the way to go.”
“We think there could have been a better way of going about it. We could have considered better ways of improving the implementation of the programme. This is the time we need to invest in the Agricultural sector.”
Charles Nyaba has also been explaining to Citi News how the current economic situation is affecting farmers.
“When you take 2021 for instance, we were getting to plough an acre for something between GH¢120 to GH¢150. This year it is going for GH¢250 to GH¢300. These increases have affected us badly.”
The Ministry of Financesays the Government of Ghana and the International Monetary Fund (IMF) have reached a clear path towards the final details of a programme with the goal of reaching a Staff-Level Agreement by the end of the year.
This follows meetings between the Government and the IMF advancing negotiations towards a Fund-supported Programme in Washington (D.C) on the sidelines of the annual meetings of the World Bank and the International Monetary Fund.
In an update to citizens, the Ministry stated that “a pathway towards fiscal sustainability has also been extensively discussed, and the Government of Ghana and the IMF remain fully committed to the goal of reaching a Staff-Level Agreement on a Programme within the shortest possible time.”
The Ministry indicated in pursuance of the Staff-Level Agreement, negotiations with the IMF will continue in Accra, as the IMF team is expected within the next few weeks.
Meanwhile the Government of Ghana has expressed its gratitude to the IMF, the World Bank, bilateral partners and external investors for their continuous support even as the country goes through a tough time.
Furthermore, “the Ministry of Finance and the Bank of Ghana thank the people of Ghana for their forbearance in what is undoubtedly a troubling and challenging time for our economy, and economies globally. Government will continue to work with a fierce sense of urgency, to stabilize the economy and place it back on a firm trajectory of growth.”
The Ministry has indicated it will continue to provide regular updates and further details on the country’s economic programme to the public immediately they become available.
“These updates will be posted on the Ministry’s website, under a section titled IMF Programme Updates,” the statement said.
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The second Deputy Governor of the Bank of Ghana (BoG) has stated that even though economies around the world will face difficult times, Ghana will overcome its challenges as the right policies are put in place.
Elsie Addo Awadzi citing the International Monetary Fund’s (IMF) prediction that there may be a global recession in 2023 noted that developing countries like Ghana are in a unique position to take advantage of the situation to accelerate economic development.
She was speaking at the 21st annual Chief Executive Officers Conference for Rural and Community Banks in Ho, in the Volta Region.
“Just yesterday, the IMF released its latest numbers on the global economy and the outlook for 2023 is a global recession. The whole world’s economy is in trouble”, she stressed.
She added that the “large unusual threat from the Covid-19 pandemic, the Ukraine-Russia war, from the unprecedented levels of inflation.
“Even in the advanced economies talking about 10%, 11% inflation which used to be a developing country’s phenomenon, today in the US, the EU, the UK are struggling with it and you see interest rates, as a result, rise very high, in their 20s”.
She asserted that the development had resulted in the financing of emerging and developing economies as “almost non-existence”, adding that investors would pick developed economies such as America and Europe for businesses in quest of higher yields.
Mrs Awadzi disclosed that her outfit is working with the Ministry of Finance and other key stakeholders to conclude discussions with the IMF towards a Reform Program that would help transform and restore the country’s economy.
“We at the Bank of Ghana are confident about the outlook for our economy. The current high inflation and Cedi depreciation are temporary and we must avoid speculative behaviour that only works against attaining stability sooner,” she advised.
She also entreated rural and community banks to leverage technology to improve service delivery as they remain essential players in the banking industry, and continue to provide critical financial services to micro, small and medium-sized enterprises and individuals.
She detailed that to enhance operations of the rural and community banks, the Finance Ministry and the Bank of Ghanahad decided to support the upgrade of the ARB Apex Bank’s e-banking platform and the modernization of the management information system of the rural and community banks.
This, she said, forms part of the Financial Sector Development Project aimed at ensuring efficient service delivery to he ever-demanding customers.
“Digitalisation comes along with its own complexities and risks, including cyber security risks, third and fourth party/outsourcing risk, data privacy breaches, technology failure risk, increased AML/CFT risks, and consumer protection risk among others. Needless to say, a lot is required by way of strong governance and risk management systems to help mitigate these risks, as financial institutions seek to exploit the benefits of digitalisation.
RCBs will therefore need to augment their capital base as needed in order to deploy more sophisticated systems and structures in line with the Bank of Ghana’s 2018 Cyber and Information Security Directive. The Directive provides for the adoption of minimum technical, governance, data protection protocols, and transaction monitoring and fraud detection and mitigation tools, to help mitigate key risks from digitisation”, she said.
The Ministry of Finance has refuted claims that about 94% of Tier 2 pension contributions placed in government securities will be affected by debt restructuring moves by the government.
Government as part of processes for securing support from the International Monetary Fund is currently conducting a debt sustainability analysis and there are fears investments in government securities may be affected.
The reports suggested that about GH¢3.7 billion of the GH¢3.9 billion Tier 2 pension contributions placed in government securities may be affected by the Debt Restructuring Programme.
In a statement, the Ministry of Finance said such fears and publications were without merit and do not auger well for the country’s financial sector.
“These publications and “social media advisories” are without merit and are designed to undermine confidence in Ghana’s financial sector,” the Ministry stressed in the statement.
The Ministry assured that the Government’s engagements with the IMF, “both in Accra and in Washington, D.C., on a Programme to restore macroeconomic stability, are progressing steadily.”
“We, therefore, encourage all Ghanaians to disregard these publications, which are in no way reflective of the progress of work being done with the IMF.”
The Ministry further asserted that it had always protected investors’ interests in the financial sector.
The Ministry of Finance has refuted claims of government planning to issue a 94 per cent discount of Tier 2 pension investments in government securities.
It has also dissociated itself from widely circulated social media content and traditional media publications encouraging a switch from securities to forex as a store of value.
“These publications and social media advisories are without merit and are designed to undermine confidence in Ghana’s financial sector.
“Indeed, they rather contribute to pressures on the currency and undermine investor confidence, ” the Ministry said in a press statement released on Friday.
The Ministry assured of a steady progress of Government’s engagements with the IMF on a programme both in Accra and in Washington D.C. to restore macro-economic stability.
“The Post- Covid Economic Growth Programme is designed to bring growth, stability, and relief to our country, ” the stressed.
The publication, the Ministry said was in no way reflective of the progress of work being done with the IMF.
“For the avoidance of doubt, it must be recalled that the Government of Ghana since 2017, has always protected investors’ interests in the financial sector.
“Government will continue with this objective and ensure that investors’ best interests are upheld at all times, ” the state assured.
The minority party’s spokesperson on finance, Cassiel Ato Forson, has questioned the government’s motivation to reach an agreement with the IMF priorto the preparation of the 2023 budget.
“I doubt in the next six weeks we are going to have a programme. That will be a magic of a lifetime,” he said on Eyewitness News.
In his view, any deal before the 2023 budget will not be in Ghana’s interest.
“It will mean we are just going to be yes men and accept everything they say,” said Mr. Forson.
The Director of Strategy and Business Operations at Dalex Finance, Joe Jackson, however, said he was willing to give the Finance Minister some benefit of the doubt.
He added that the targets are aggressive, but both parties are operating with an awareness of the urgency of the situation.
“Unless somebody shows me any reason that the team is not going to work day and night to achieve that target, I will be cautiously optimistic,” Mr. Jackson said.
An IMF team is in Ghana until October 7 to continue discussions with the government on policies and reforms that could be supported by a lending arrangement.
The Ministry of Finance and the Bank of Ghana have commenced a comprehensive debt sustainability analysis with the IMF for a $3 billion support programme.
The meeting with the IMF comes amid concerns that Ghana is about to start talks with domestic bondholders on a restructuring of its local-currency debt.
An economist,Dr. Adu Sarkodie, hopes the government will consider bilateral partners first when working on the country’s debt restructuring.
“Left to me alone, I think the first people we should deal with are the bilateral loans because it is quite easy,” Dr. Sarkodie said on The Point of View on Citi TV.
“They understand issues. That is why it was easy for us to get the HIPC [Highly Indebted Poor Country] relief because once you talk to them, these countries are likely to forgive our debt or give us a haircut or understand our situation.”
He estimates that favourable negotiations with bilateral partners could see Ghana deal with 30 percent of its debt.
Though Dr. Sarkodie said there could be mixed results, he believes the backing of the IMF gives Ghana an advantage.
“As a whole, I think the government will be able [to restructure our debts], especially with the backing of the IMF.”
Dr. Sarkodie stressed further that Ghana needed the buy-in of bilateral partners “other than that we are doomed.”
An IMF team is in Ghana until October 7 to continue discussions with the governmenton policies and reforms that could be supported by a lending arrangement.
The Ministry of Finance and the Bank of Ghana have commenced a comprehensive debt sustainability analysis with the IMF for a $3 billion support programme.
In the event that the government does not reinstate their working conditions, the University Teachers Association of Ghana (UTAG) has vowed to withdraw its service.
Professor Solomon Nunoo, the president of UTAG,says that the government’s refusal to meet their needs, such as the Book and Research allowance, has a continuing impact on how they carry out their responsibilities.
UTAG together with the Ghana Association of University Administrators (GAUA), Tertiary Education Workers Union of Ghana (TEWU–GH), and the Senior Staff Association of Universities of Ghana (SSA–UoG) at a press conference said;
“This continued delay is causing unnecessary apprehension on the various campuses.
“The employer should remember that we are in the new academic year, for which reason continuous delay in the payment is unacceptable.”
They said the failure of the government to address this issue will compel them to withdraw their services.
“We wish to state that the Ministry of Finance, through GTEC, should ensure that the conditions subsequent to the support of staff welfare in extricating them from economic hostilities will not disadvantage them relative to the Conditions of Service of members of Labour Unions in Public Universities.
“We are by this Press Conference registering our displeasure on the directive and requesting that under no circumstance should Vice–Chancellors, through their Finance Directors, implement such by applying the Gh¢10.99 ex–pump approved rate ONLY to Fuel Allowance without considering Vehicle Maintenance and Off–Campus Allowances.
“Failure to address these essential concerns will result in the possible total withdrawal of our services across all Public Universities in Ghana,” the statement read.
Ghana has recorded $731.94 million for the first half of 2022, representing 93.4 per cent of the 2021 annual petroleumrevenue of $783.33 million.
The figure, $51.39 million less than petroleum revenue for the entire year of 2021, indicated a 73.73 per cent increase in the projected petroleum revenue for the year and a 108.89 per cent increase in receipts for the first half of 2021, which was US$350.3 million.
“The significant rise in revenue is mainly due to the sharp increase in the price of crude oil on the world market in the first half of 2022, ” the Public Interest and Accountability Committee disclosed in its 11th Semi-annual report.
The Committee’s 22nd statutory report, which was launched on Tuesday, showed that $190.44 million was earned from royalty with Carried and Participating Interest (CAPI) earning $354.2 million.
Meanwhile, Corporate Income Tax (CIT) accounted for $186.34 million as Surface rental generated $687,759.16 with Income on Petroleum Holding Fund (PHF) accounting for $304,613.
“The receipts are made up of lifting proceeds of US$544,614,112.68 representing 74.40 per cent and other receipts of US$187,330,716.19, representing 5.60 per cent, ” the report highlighted.
It was further disclosed that Ghana produced 25,861,810.42 barrels (bbls) of crude oil in the first half of 2022 from its three offshore producing Fields – Jubilee, TEN, and SGN.
This represents a 6.9 per cent reduction from the first half of 2021 production volume of 27,767,859.00 barrels (bbls) and the third consecutive reduction in year-on-year crude oil production volumes since inception.
PIAC in the report further noted that crude oil production increased in the Jubilee Field by 16.6 per cent while a decline of 34.3 and 21 per cent were recorded respectively for production on the TEN and SGN fields.
Ghana has been urged by the International Monetary Fund to add the 1.5 billion COCOBOD syndicated loan and the 2 billion Sinohydro loan from China to its current debt stock.
On September 27, 2022, norvanreports.com reported this.
The new IMF mission in Ghana is performing a thorough debt sustainability analysis as of September 26, 2022, and the IMF highlighted that this will present a clear and comprehensive picture of the country’s overall debt stock.
When the debt stock is included, Ghana’s GDP to debt ratio will increase from 78% (GH396 billion) to over 80% (GH399.5 billion).
Meanwhile, the government is said to be reluctant in making the addition, whiles noting that the Sinohydro loan was a barter trade for the country’s bauxite resources, norvanreports.com have said.
The government of Ghana commenced discussions with the International Monetary Fund on Monday, September 26, 2022.
According to the government, a comprehensive Debt Sustainability Analysis (DSA) which is a key requirement for securing an IMF-supported program is currently ongoing.
The move, the government said, is a necessary requirement to ensure that Ghana’s debt is on a sustainable path.
A release by the Ministry of Finance on September 26, 2022, said, “The Government of Ghana is putting together a comprehensive post-Covid-19 economic programme which will form the basis for the IMF negotiations. The programme seeks to establish a macro-fiscal path that ensures debt sustainability and macroeconomic stability underpinned by key structural reforms and social protection.”
The Ministry of Finance and the Bank of Ghana have commenced discussions with the International Monetary Fund (IMF) for the second time for an IMF-supported programme.
The government is also expected to begin negotiations with the IMF this week which will last for about two weeks.
“Government negotiations with respect to the IMF-supported programme is commencing this week and we are optimistic about making progress in our discussions,” a statement issued by the Ministry noted.
In order to achieve a programme from the IMF, the government says it has put together a “comprehensive post COVID-19 economic programme which will form the basis for the IMF negotiations.”
This programme, the Ministry said is to establish a macro-fiscal path that ensures debt sustainability and macroeconomic stability underpinned by key structural reforms and social protection.
Meanwhile, the Ministry of Finance has disclosed that it is currently undertaking a debt sustainability analysis to confirm the country’s debt sustainability.
The Ministry in a statement on Monday, September 26 said this is necessary as it is a prerequisite for an IMF Programme.
The IMF has also announced that its economic programme with Ghana will focus heavily on debt sustainability.
This was captured in a Question and Answer statement issued by the IMF as it begins deliberations with the Government of Ghana on an Economic Programme aimed at stabilising Ghana’s economy.
The IMF also added that the programme will support the credibility of government policies, restore confidence in the central bank’s ability to manage inflation and accumulate foreign exchange reserves to help the local currency withstand headwinds.
On the Fiscal sector, the IMF noted that an important policy objective would be to increase revenues, critical for debt sustainability while safeguarding spending on health, education, and social protection.
Details of the engagement
Dr. Stephane Boudet is expected to lead the IMF mission team members made up of senior economists, research analysts, and communication officers.
Joy Business is learning that issues about the country’s current fiscal position as well as steps taken to improve the revenue situation will come up.
The IMF team will engage the Finance Minister, Ken Ofori-Atta, the Governor of the Bank of Ghana, Dr. Ernest Addison, Vice President Dr. Mahamudu Bawumia, some business associations, civil society groups and parliament.
The IMF in its Question and Answer statement maintained that the engagement follows several visits in recent months to engage with the authorities.
The payment of allowances to nurses on a one-year required rotation at various health facilities across the country has been approved by the Ministry of Finance.
With effect from October 1, 2021, until September 2022, 5,239 diploma nurses, midwives, and allied health professionals who passed licensing tests will each receive GH871 per month.
“The emoluments of the interns should be charged against the compensation of employees vote of the Ministry of Health in the 2022 annual estimates”, a statement from the Finance Ministry said.
Parliament has passed the Fees and Charges (Miscellaneous Provisions) Bill, 2022, which seeks to regularize the fees being charged by some public service institutions.
The bill is also expected to review existing fees, impose new ones and provide for an annual adjustment of fees and charges levied by ministries, departments, and agencies (MDAs) in line with prevailing economic conditions.
Among other things, it will also establish a single schedule of all fees and charges for the delivery of goods and services rendered by the MDAs to the public.
The proposed adjustments of some of the fees and charges are expected to contribute significantly to meeting the revenue targets outlined in the budget for the 2022 fiscal year.
Background
In 2018, Parliament passed the Fees and Charges (Miscellaneous Provisions) Act, 2018 (Act 983) which transferred the authority to determine fees and charges under an enactment to the minister responsible for finance.
Act 983 also mandates MDAs to conduct an annual review of the administrative efficiency of collection, the accuracy of past estimates, and the relevance of fees and charges to current economic conditions.
Additionally, the Public Financial Management Regulation, 2019(L.I 2378) directs a Principal Spending Officer responsible for collecting various types of fees and charges to conduct an annual review of the administrative efficiency of past estimates and the relevance of rates, fees, and charges and submit proposals through the minister responsible for finance to Parliament for approval.
The two enactments, therefore, mandate MDAs to adjust regular basis fees and charges collected for the delivery of goods and services to the public to keep pace with the current economic trends.
This new bill is to ensure a regular review of the fees and charges levied by the MDA, avoid a steep increase arising from long periods without review, bridge the growing gap between the cost of service delivery and approved fees and simplify the process for review of fees and charges to a single submission to Parliament as part of the annual budget.
Observation
Per a report submitted on the bill, the Chairman of the Finance Committee, Kwaku Kwarteng, said the committee noted during its deliberations that a number of government agencies and institutions responsible for the collection of non-tax revenues on behalf of the government failed to lodge revenues collected in gross in contravention of Section 46 of the Public Financial Management Act, 2016 (Act 921).
The report said many of the subvented agencies either retained part or paid the entire revenues collected directly into their operational accounts from which disbursements were made.
“Again, some institutions also collect revenues on the table or over the counter after which it is lodged into their operational accounts and disbursed directly in contravention of the Public Financial Management Act, 2016. The committee noted with concern that the practice does not give the Minister of Finance a complete or comprehensive view of the total revenue (non-tax) generated by all state agencies in each fiscal year,†he said.
Additionally, the practice could expose public funds to abuse and embezzlement by collecting officers, the committee observed.
“The committee, therefore, recommends that the Ministry of Finance should take immediate steps to ensure that all institutions captured in the Second Schedule of the bill collect their revenues through a designated commercial bank or through the Ghana.gov platform from which the funds collected are transferred in gross into the respective holding accounts at Bank of Ghana,†the report said.
The Ministry of Finance is yet to release Gh¢10 Million budgeted for in the 2022 budget statement to commence Phase two of the Blekusu Sea Defense Wall located at Ketu South Municipality of the Volta Region to prevent perennial sea erosion in the area.
The Government through the Minister for Finance in the 2022 Budget Statement, allocated about GH¢10 million towards a comprehensive Feasibility Study of Blekusu and surrounding areas in accordance with the Public Financial Management (Public Investment Management) Regulation, LI 2411, in order to conduct more comprehensive feasibility study as required.
The Sector Minister who was answering questions from the MP from Area, Abla Dzifa Gomshie on Wednesday, 1st June, 2022 regarding the status of the phase II of the project, the Minister, Francis Asenso Boakye said, “my Ministry is engaging the Ministry of Finance for the release of the funds to enable the Hydrological Services Department undertake the additional Feasibility Studyâ€.
According to the Minister, the work done under the first phase has functioned effectively to protect the people, while enhancing fishing activities, which is the main source of livelihood for the affected communities.
In his previous response to the same question on floor sometimes ago, the indicated that “the Ministry of Works and Housing noted the urgent need to undertake the second phase of the Blekusu Coastal Protection Project and therefore commissioned technical feasibility study focused on Blekusu community to enable Messrs Amandi Holding Limited continue with Phase 2 of the Projectâ€.
He, however, revealed that, the Ministry is taking urgent steps towards the construction of the second phase of the Blekusu Sea Defence Project to mitigate the risk of coastal erosion and flooding of the communities along the coastal stretch due to intense tidal wave action.
He mentioned the fact that “beaches along the Blekusu coastal stretch are narrow and are eroding at an alarming rate because of tidal wave action.
Some communities along this coastal stretch often experience flooding in the event of wave overtopping. These have impacted negatively on lives, livelihoods and propertiesâ€.
Action was taken to mitigate beach erosion and flooding of communities along the Blekusu coastal stretch, “the Ministry of Works and Housing from July, 2015 to July, 2019 engaged Messrs Amandi Holding Limited to complete the first phase of the Blekusu Coastal Protection Project.
The works entailed the construction of 23 Armour Rock Groynes to protect a coastal stretch of 4,300metres (i.e. 4.3 kilometres)â€.
