Securities, Insurers Join Debt Exchange Programme

Ken Ofori-Atta


The Ghana Securities Industry Association (GSIA) and the Ghana Insurers Association (GIA) have reached an agreement with the government on their participation in the Domestic Debt Exchange Programme (DDEP).

Under the agreement, insurance companies would participate in the exchange on similar terms as the banks.

The government, through the solvency window of the Ghana Financial Stability Fund (GFSF), would provide support for the insurance companies that were seriously affected by the DDEP.

Trust accounts with Securities and Exchange Commission (SEC) approved firms, would be offered any enhanced commercial terms agreed with, or exemptions granted to Individual Bondholders.

The agreement also entailed extending agreed improved terms with the banks to all GSIA members and the removal of all clauses in the Exchange Memorandum that empowered the Republic to, at its sole discretion, vary the terms of the exchange.

Similar to terms of banks, government has agreed to pay five per cent coupon rate for 2023 and a single coupon rate for each of the 12 new bonds to be issued, resulting in an effective coupon rate of 9 per cent.

Government has also committed to providing support to GSIA members impacted by the programme through the liquidity and solvency window of the GH$15 billion Ghana Financial Stability Fund (GFS).

The GIA, in a joint statement, expressed satisfaction upon reaching the deal with the government saying it protected its members, but also enabled the government to push through the necessary economic reforms in these difficult times.

Such milestone, on the back of the success with the banking industry, has taken the Government closer to completing the DDEP, which is a key factor to restore economic stability and growth.

GSIA said the agreement was necessary to restore market normalcy and confidence in the economy.

GSIA ha therefore urged its members to seek all required internal approvals and clients’ consent to participate in the DDEP per the new terms in the updated Exchange Memorandum.

With this achievement, Government has also reiterated its commitment to concluding the DDEP in time with all other stakeholders.

By Jamila Akweley Okertchiri