In response to the government's domestic debt exchange program, which is expected to affect institutional bondholders, a number of professional institutions have spoken out against it.The primary defense is that government shouldn't ever intervene in pensions, the majority of which are held in institutional bonds.

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All debts have been divided into four categories as part of a restructuring exercise that has been made necessary by recent economic headwinds, according to an announcement made by Minister of Finance Ken Ofori-Atta on December 5.

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Whiles individual bondholders and investors in Treasury Bills were exempt from the exchange, the Minister outlined the main modalities as follows:"Under the Programme, domestic bondholders will be asked to exchange their instruments for new ones. Existing domestic bonds as of 1st December, 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.

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"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."Since the announcement, the following bodies have kicked against the programme.

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National Association of Graduate Teachers (NAGRAT)Speaking to the press in Accra on Monday (December 5) the President of NAGRAT, Angel Carbonu, said that if the government proceeds with its plan, his union and other labour unions in the country will lay down their tools.“We enter into a contractual agreement that I am buying bonds at ‘X’ per cent. So, I have informed the beneficiaries that I have bought bonds on your behalf at this rate.

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All of a sudden, government who is the party on the other side of the agreement comes to say, for me, this is what I can pay, take or leave it.“This will not be accepted, my union NAGRAT, the teacher unions do not accept this. We are members of the forum made up of the public sector unions and we want to assure our members that we will resist this move by the government," he said.

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The Ghana Registered Nurses and Midwives Association (GRNMA)The GRNMA through a press statement registered their dismay and disappointment at the proposed Debt Exchange programme.The Association explained the basis for its rejection stating that “Pension funds are a collection of contributions of individuals. By design they are meant to protect the vulnerable during retirement.

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"Thus any treatment of “individuals” as stated by the Minister of Finance must be indeed extended to all individuals as with pension funds including our GRNMA Fund, a Provident Fund for over 101,000 contributors who are nurses and midwives within the nursing and midwifery fraternity;“Pension funds, particularly Tier 3 schemes, were encouraged to hold their investments for a minimum of 10 years.

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Since its inception in 2012, most schemes have just met the 10 years or will be 10 years next year."Debt exchange for pension funds will mean that workers will not have access to Tier 3 funds after waiting for 5 – 15 years. This is simply unacceptable! To the National Pension Regulatory Authority’s (NPRA) regulations, all Pension Schemes have most of their assets in GOG securities," the statement read in part.

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Ghana Medical Association (GMA) The GMA in a statement on December 6 said the debt restructuring programme will have a negative impact on its members’ pensions funds and healthcare delivery in the country.“The GMA is also concerned about the negative effect of the debt exchange programme on Private Health facilities, private health insurance and mutual schemes that have invested heavily with Government of Ghana bonds.

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"This we believe will impact negatively on patient care, medication supply and claims management,” the statement said.Trades Union Congress (TUC)“We have taken special note of the statement by the Minister for Finance that the Debt Exchange Programme is voluntary. The TUC will scrupulously analyse the propriety or otherwise of the participation of pension funds of its members in the programme.

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“We are assuring workers, that the TUC and its Affiliate unions will do everything in our power to ensure that our members are fully protected and that not even a pesewa of pension funds is lost in the Debt Restructuring Programme,” the TUC said in a statement issued on December 5, hours after the Minister's announcement.

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Ghana Chamber of Commerce “On 30th October, 2022, The President of Ghana Nana Addo Dankwa Akuffo Addo addressed the nation and assured all Ghanaians that “there would be no haircuts on pension funds”. A few weeks after this announcement, we are all witnessing, rather surprisingly, a major U-turn from that position.

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”“We have carefully analyzed the announcement by the Minister of Finance on the Debt Exchange Program and are of the opinion that it is injurious to the interest of contributors to pension schemes,” the Chamber said in a December 6, 2022 statement. 

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