DEP: Economist lauds gov’t decision to pay 5% interest this year

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An Investment Finance Expert and Economist, Mr Sherlock Ashiagbor has lauded the government’s consensus decision with the banks to pay 5% interest this year.

After a crunch meeting between the government and the bankers association on Monday, January 23, 2023, to negotiate new designs and concessions to make it easier for banks to participate in the voluntary Debt Exchange Program (DDEP), the bankers association asked the government to provide clarity on the operational framework and terms of access to the Ghana Financial Stability Fund (GFSF).

The government however agreed to pay a five per cent coupon (interest) on bonds for this year and also pay a single coupon of nine per cent on the 12 new bonds it proposes to issue to domestic bondholders who tender their old bonds.

The government and the bankers also agreed on the removal or amendment of all clauses in the Exchange Memorandum that empowered the Republic too, at its sole discretion, vary the terms of the exchange.

This move by the government is what Mr Sherlock Ashiagbor say will help regain the confidence of the Ghanaians in the banking sector and will also better position the banks to deliver on their mandate.

He added that individual bondholders need to understand what is going on economically in light of what they are looking for with their investments. That he said will allow them to negotiate well with the banks and by extension government.

Source: Patrick Ennimil Arthur

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