Government has said it is setting up a Financial Stability Fund with the help of development partners to provide liquidity support to banks, pension funds, insurance companies, fund managers, and collective investment schemes to ensure that they are able to meet their obligations to their clients. This comes on the back of government’s debt restructuring deal with the International Monetary Fund (IMF). As part of the debt restructuring, Finance Minister Mr Ofori-Atta at a press conference over the weekend said “domestic bondholders will be asked to exchange their instruments for new ones”. Also, “existing domestic bonds, as of 1December 2022, will be exchanged for four new bonds maturing in 2027, 2029, 2032 and 2037”. “The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity”, he announced Sunday evening (4 December 2022). Coupon payments will be semi-annual, he said He noted that the government’s commitment to Ghanaians and the investor community, in line with negotiations with the IMF, is to restore macroeconomic stability in the shortest possible time and enable investors to realise the benefits of this Debt Exchange. Read Mr Ofori-Atta’s full address below: Good Evening Ghanaians, In the Budget Statement presented to Parliament on November 24th, I announced that government will undertake a debt operation programme. The broad contours of the Debt Sustainability Analysis has been concluded and I am here this evening to provide some details on Ghana’s Domestic Debt Exchange which will be launched tomorrow. External debt restructuring parameters will be presented in due course. Under the Programme, domestic bondholders will be asked to exchange their instruments for new ones. Existing domestic bonds as of 1stDecember 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037. The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity. Coupon payments will be semi-annual. Our commitment to Ghanaians and the investor community, in line with negotiations with the IMF, is to restore macroeconomic stability in the shortest possible time and enable investors to realize the benefits of this Debt Exchange. The Government of Ghana has been working hard to minimise the impact of the domestic debt exchange on investors holding government bonds, particularly small investors, individuals, and other vulnerable groups. In line with this: Treasury Bills are completely exempted and all holders will be paid the full value of their investments on maturity. There will be NO haircut on the principal of bonds. Individual holders of bonds will not be affected. The government recognises that our financial institutions hold a substantial proportion of these bonds. As such, the potential impact of this exchange on the financial sector has been assessed by their respective regulators. Working together, these regulators have put in place appropriate measures and safeguards to minimise the potential impact on the financial sector and to ensure that financial stability is preserved. Specifically: The Bank of Ghana, the Securities & Exchange Commission, the National Insurance Commission, and the National Pensions Regulatory Authority will ensure that the impact of the debt operation on your financial institution is minimized, using all regulatory tools available to them. A Financial Stability Fund (FSF) is being established by Government with the help of development partners to provide liquidity support to banks, pension funds, insurance companies, fund managers, and collective investment schemes to ensure that they are able to meet their obligations to their clients as they fall due. These are difficult times and we count on the support of all Ghanaians and the investor community to make the exercise successful. We are confident that these measures will contribute to restoring macroeconomic stability. With your understanding and support and that of the entire investor community, we shall overcome our current difficulties, and with the help of God, put our economy back on the path of renewed and robust growth. As 1stSamuel 30:19 says, nothing was missing, small or great. I say to you, nothing will be lost, nothing will be missing, and nothing will be broken. We will, together, recover all. Thank you and God bless our homeland Ghana. Meanwhile, an IMF staff team, led by Stéphane Roudet, mission chief for Ghana, has been visiting Accra from, Thursday, 1 to 13 December 2022 to continue discussions with the authorities on the country’s post-COVID programme for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement. The IMF staff will also further engage with other stakeholders during the visit. Ahead of the visit, Mr Roudet said: “We have had productive discussions with the Ghanaian authorities over the last few months and look forward to our engagement in Accra”. “Our objective for this visit is to make further progress toward reaching an agreement on policies and reforms that could be supported by an IMF lending arrangement”. “The IMF remains fully committed to help Ghana restore macroeconomic stability, bring relief to Ghanaians in this time of crisis, and lay the foundation for more inclusive growth.” In Ghana’s 2023 budget, Finance Minister Ken Ofori-Atta said the government and the IMF have agreed on programme objectives, a preliminary fiscal adjustment path, debt strategy and financing required for an extended credit facility programme to be in line with the government’s Post-COVID-19 programme for Economic Growth (PC-PEG). The PC-PEG is the government’s blueprint to restore macroeconomic stability, promote debt sustainability, sustain economic recovery and support structural reforms. Updating the house on the negotiations so far, Mr Ofori-Atta said: “Mr. Speaker, since the government announced its engagement with the International Monetary Fund for a supported programme on 1 July 2022, we have made “substantial progress”. The Fund, he said, has assured the government of its “strong commitment and support in these difficult times”. —Classfmonline— For publication please kindly contact us on 0256336062 or Email apexnewsgh@gmail.com

The Ghana’s Finance Minister Ken Ofori-Atta has revealed Government through the 2023 Budget Statement and Economic Policy is seeking to intensify efforts at mobilizing domestic revenues to help finance its transformative agenda and help build back the Ghanaian economy from the ravages of the Coronavirus pandemic and the adverse effects of the geopolitical tension between Russia and Ukraine. Finance Minister, revealed this during the presentation of the 2023 Budget Statement and Economic Policy in Parliament on Thursday, November 23, 2022. With dwindling revenue streams attributable to a slowdown in business activities occasioned by a global recession, Ghana is behind most of its peers within the West African sub-region as far as Tax to Gross Domestic Product (GDP) is concerned. While Ghana is doing below 15 per cent, countries in the sub-region like Cote d’ivoire and Nigeria are hovering around an average of 18 per cent. This Minister Ofori-Atta in his budget presentation explained has led government to expand the tax net and implement tax efficient measures to increase its revenue streams and shore up government finances. One of such revenue measures he said is the introduction of a common platform for property rate administration to enhance property rate collection by all Metropolitan, Municipal and Districts Assemblies (MDAs) in the country. He said property rates have the potential to increase revenue mobilization for MMDAs and release resources for the provision of basic infrastructure as well as the needs of the generality of Ghanaians at the local level. Mr. Ofori-Atta also indicated government plans of increasing the Value Added Tax (VAT) by two and half percentage point. The VAT, which was last increased in 2014, coincidentally when Ghana was under a Fund programme will now be set at 15 per cent. “Mr. Speaker, the demand for roads has become the cry of many communities in the country. Unfortunately, with the current economic difficulties and the absence of dedicated source of funding for road construction, it is difficult to meet these demands. In that regard we are proposing the implementation of new revenue measures. The major one is an increase in the VAT rate by 2.5 percentage points,” he said. Explaining the rationale behind the increment, the Finance Minister said this would enable the country to raise resources to build the economy back to its pre-COVID-19 levels as cost of borrowing to finance government expenditure has become increasingly expensive. Source: Apexnewsgh.com/ Ghana For publication please kindly contact us on 0256336062 or Email apexnewsgh@gmail.com