June 14, 2024
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‘Even the bankers don’t know what is going on’ – Individual bondholders on debt exchange

The government’s debt exchange programme is experiencing strong pushback from individual bondholders who say the government has not provided them with the requisite information to make an educated decision.

According to some individual bondholders interviewed on JoyNews’ PM Express, the government has intentionally held back information, and instead is coercing them into signing onto the exchange blindly.

One bondholder, Samuel Bekoe, says while government has made clear whatever ‘benefits’ bondholders who sign onto the programme may enjoy, it has remained silent on the consequences for those who will refuse to sign.

“We haven’t gotten full information about the entire programme and what the intent is, because we haven’t had any option in terms of the option not to sign and what the consequences would be. Government never mentioned anything…” he said.

Roberta Sittie, also a bondholder said even her bankers have little to no explanation concerning the debt exchange programme and have merely been using a fear mongering tactic to get her to sign documents.

“Four, five days ago one of them called that I should pass by the bank and sign a document. What is the document about? I mean some people are saying you’ll lose 40% of your principal if you try discounting. Some are saying that the platform for the re-discounting or for you to withdraw has been blocked. I mean, you don’t have answers, you don’t know what is going on.

“The bankers themselves don’t know what is going on. I’ve called them, from the treasury department to the branch, they can’t give you answers. So why do you ask me to go and sign to a debt exchange form that I know nothing about. The calculation is… you can’t even understand. Why?” she said.

She added, “ They just said you should pass by there’s a document for us to sign and submit by 11th, that’s what they said. Just that. What document? How does it work? They don’t know, they can’t give you that explanation, they can’t tell you. Just ‘come’. It’s like they’re coercing you, they’re afraid, ‘just come, come and sign the document before 11th.

“And I mean, how do you communicate to somebody you borrowed money from …if the government had given me money and I had defaulted, I am saying that I wouldn’t pay; I would have given a collateral for such an amount. So if there is any restructuring, you need to get back to me. But I was the one doing this as a customer or as a client.”

Samuel Bekoe said he has also experienced the coercion Mrs. Sittie described in her speech.

 “Even though the word voluntary was quite repeatedly used but it was also mentioned that ‘look the fiscal stability amount that they have set aside was not going to benefit people who do not sign on.’ So that is one indication that you’re supposed to sign on,” he said.

According to him, his bankers, Databank, had couched the message to make it seem as if bondholders’ refusal to sign the documents will lead the country into an unending economic turmoil.

He noted that while they had done well to inform them of the doom their stubbornness may cause, they failed to acknowledge the government’s mismanagement that had led to the prevailing situation in the first place.

“Number two, given that government did not tell us what the consequence of not signing on is, the Jamaican example was explained as successful because people wanted the country and not their personal individual self, so in this case they’re trying to tell us that if we do not sign up to this or come to exchange our bond we’re holding the country to continuous economic crisis without any potential future for that particular country.

“But what they should have also mentioned which they didn’t was that the mismanagement, the borrowing, the lack of evidence of those borrowing that we never saw was not done by we individual bondholders.

“We are just a victim of somebody’s own decision making that even as until a few days to us going to IMF the Finance Minister had reiterated his stance that we are not going to IMF which gave us all confidence that we are not going to IMF, our bonds are going to be safe.

“So even though they use the word voluntary, some of the terms as provided seems as if it is going to be kind of coerced. We’re going to be coerced into bringing back your old bond in exchange for the new bond,” he said.

Mr. Bekoe said the government’s posture on the debt restructuring is a loud signal that Ghana’s bonds are unattractive and investors, both domestic and international, are not welcome.

“What I’m also getting is that the way things are going, I think the government is indirectly informing Ghanaians that do not come back to invest your money into government bonds anymore, because I have sworn out of it and I will never ever, regardless of what the interest is, what the attractiveness is , I will never ever go to invest in bonds in Ghana anymore,” he said.

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