I have been given a haircut of over GHc100,000- Franklin Cudjoe Writes

President of IMANI Africa, Franklin Cudjoe has said he lost over Ghs100,000 in Ecobank’s EDC Investment due to the Mark-to-Market directive.

He wrote on his Facebook wall,

“I have been given a haircut of a little over 100,000 cedis in my EDC investment made over the years based on Marked Market value. My fund manager adds a note rather painfully, that “Investors that choose to remain in the fund until Ghana’s macroeconomic health and bond prices improve are not likely to realize these losses.” Folks, based on IMANI’s analysis of government handling of finances from 2010 to 2022, leading to the publication of IMANI’s Fiscal Recklessness Index, this means waiting for at least 8 years for governments not to be so reckless in pretending to manage the economy. And this will be hoping against hope. Until we fix our broken political system that rewards cheap sloganeering with limitless tax and borrowed funds to be splurged at will, we are going nowhere.”

Meanwhile, the Finance Minister has stated emphatically that there will not be any principal haircut. He however detailed to Ghanaians how the debt exchange will be like. Read the full details here in a speech he read of the form the debt exchange program will come.

“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 recognizes 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 minimize 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 te 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.”, an excerpt.

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