Pension funds exempted from Debt Exchange Programme

Pension funds exempted from Debt Exchange Programme following the threats by TUC  to embark on nationwide strike if government touches pension funds as part of government’s Debt Exchange Programme.

The government has disclosed that Pension funds will be exempted in a through a Memorandum of Understanding (MoU) dated 22nd December, 2022.

The Trade Union Congress gave government up to end of day, 26th December to make a public pronouncement or be hit with a strike and had also called on all workers to stay home from December 27th if no information is received from government.

In a letter dates 22nd December, 2022, the government of Ghana proactively announced an exemption of all pension funds from the Debt Exchange Programme.

The exemption of all pension funds, however, is subject to the government and Organised Labour working together to explore mutually beneficial options within the debt sustainability terms.

After the meeting on Thursday, through a Memorandum of Understanding (MoU) between the government and Organised Labour, a seven-member committee was formed to explore technical solutions to bring the debt threshold back to sustainable.

“We believe that Government and Organised Labour can work together in the spirit of social partnerships to resolve all outstanding issues to make the Debt Exchange Programme successful towards restoration of macroeconomic stability and economic recovery,” the MoU stated.

It would be recalled that government on December 5, 2022, announced a debt restructuring measure.

According to Ken Ofori-Atta, the objective is “to invite holders of domestic debt to voluntarily exchange approximately GH¢137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic.”

Bondholders like pension funds, banks and insurance firms will have to exchange their bonds for one that will earn zero interest next year.

The new bonds will only begin to earn five per cent interest in 2024 and 10 per cent for the remainder of their tenure. The maturity dates have also been extended with the first bonds only maturing in 2027.

Organised Labour since the announcement of the Debt Exchange Programme on December 5 has strongly indicated its rejection of the programme for fear of ‘haircuts’ on pension funds of members.

The labour unions described government terms under the programme as “draconian” and opposed any move by the government to go ahead with the programme.

Government after considering the several agitations from the various labour unions extended its December 19 deadline date for bondholders and financial institutions to sign unto the Programme to December 30.

READ: Christmas Sales: Prices of Cars in Ghana 2022/2023 (Honda Cars)

Meanwhile, Organised Labour has declared a strike action effective December 27 over the debt exchange programme.

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Written by Ghana Education News Editorial Staff

The Ghana Education News Editorial Staff is comprised of seasoned education consultants, policy analysts, and verified journalists dedicated to providing accurate, timely, and credible updates on the Ghanaian GES curriculum, WAEC updates, and academic leadership.