An economist, Dr Theo Acheampong, says government does not necessarily need the participation of individual bondholders to complete the Domestic Debt Exchange Programme.

Speaking on JoyNews’ Newsfile on Saturday, he explained that the recent agreement based on a revised term between the government and some three institutions is enough to enable the completion of the programme.

Dr Acheampong said that the consequence of including individual bondholders in the process would be dire.

“You have three of the important stakeholder groups now agreeing through their association to be a part of that process with revised terms that the government is offering to them. Specifically, we have the security agencies, the banks, insurance companies, and of course there’s the central bank and the likes in there."

"Collectively, when you add all of them up, it is possible to actually get about 55% - 70% participation in the programme. What that then means is that you don’t necessarily actually need the individual bondholders for this to become a success in that regard,” Dr Acheampong said.

Explaining further, the economist indicated that other institutions have other incentives to cushion them should the restructuring exercise pose any problems afterwards.

However, individual bondholders have no such alternatives, hence they could suffer dire repercussions even under the revised terms.

In a bid to rescue the economy and secure a deal with the International Monetary Fund (IMF), government has proposed that all bondholders will not receive any interest on their bonds for the 2023 financial year.

The payment of dividends, according to the government is likely to begin next year, 2024 at a discounted rate of 5%.

But individual bondholders vehemently fought the decision and also protested the lack of prior engagement between individual bondholders and the Finance Ministry concerning their inclusion into the programme.

The recent development on the Domestic Debt Exchange Programme indicates that three institutions including the Ghana Association of Banks (GAB), Ghana Insurers Association (GIA) and Securities Industries have agreed to participate in the exercise, although on a revised term.

However, individual bondholders continue to drum home their request to be exempted as they lament the consequences that would be incurred in the process.

But, the convener of the Individual Bondholders Forum, Senyo Hosi in reiterating the stance of the forum said that there will be more crisis should the confidence of the bondholders be crushed by the government’s failure to heed their request.

Mr Hosi explained that the forum during its recent meeting with the government has recommended a fiscal readjustment such that government cuts down on its budget deficit and expenditures.

This measure, he said could be blended with the government’s debt operations proposal to help revive the economy.