Why this unnecessary burden on pensioners and individual bond holders in the country?

Treasury Bonds are medium term debt instruments (Securi­ties) issued by the Government of Ghana and sold to individuals or companies to raise funds for a specif­ic time at a fixed or variable interest rate. The bonds have maturity peri­ods exceeding two years.

Over here in Ghana, there is no upper limit but a maximum limit of GHc500.00 is required for the pur­chase of a bond. It generally includes a commitment to pay periodic inter­est called coupon payment and to repay the face value on the maturity date.


Unlike savings, bonds, especially those from government and major companies tend to be a safe invest­ment. They can offer much higher return than savings account. The nature of this facility, has encouraged the majority of companies and indi­viduals to rope onto the scheme with the intentsion of recouping sizeable interests to support them in various ways and endeavours. Even most employers in the country have taken advantage of the immense benefits to register their workers on the scheme.

In recent times, the government in its determination to revive the country’s ailing economy, has adopted a number of measures including a sus­pension on payment of external debt.

It,therefore, announced a Domes­tic Debt Exchange Programme which requires institutional holders of eligi­ble bonds to agree to writing to the Central Securities Depository (CSD) to exchange their current holdings to new ones.


Initially, the government an­nounced that Pension funds would be included in the debt exchange pro­gramme but Organised Labour, stood firmly against the decision which many believed was part of the con­ditions spelt out in the International Monetary Fund (IMF) laid out process­es for the economic bailout. Organ­ised Labour including the Civil and Local Government Staff Association of Ghana (CLOGSAG) and the Industrial and Commercial Workers Union (ICU), had all rejected the government’s attempt to include the pension funds in the debt exchange program.

According to organised Labour, it was against the law for the govern­ment to touch the pension funds. While CLOGSAG and the Ghana Med­ical Association (GMA) served notice that members would embark on industrial action, should the govern­ment fail to heed their call, the ICU also stated that it would be com­pelled to join other labour unions to demonstrate against such measures by the government.

After series of meetings between the government and Organised Labour on that thorny issue, the general consensus was to exempt the pension funds from the debt restructuring programme.

Hear the Minister of Employment and Labour Relations Mr. Ignatius Baf­four Awuah, on the outcome of the meeting on Thursday, December 22, 2022. “Government and the organ­ised labour will work together to re­solve all issues to make the program successful towards the restoration of macroeconomic stability of the country.”


It is surprising to know that after the attempts to include the pension funds on the debt restructuring programme had failed, the government has now turned its attention on individual domestic bondholders, as part of measures to salvage the ailing economy.

In the latter part of December last year, the government invited indi­vidual bond holders to exchange their old bond holdings for new ones with extended maturity in a domestic debt exchange programme. The invitation to this exchange programme, expired on January 16, 2023, at 4 pm, but the deadline has been extended to 31st January, 2023, at 4 pm.

According to the government, this exchange programme, would allow the country to restore sound public finance and sustainable debt levels and to kick-start economic growth, following the impact of COVID-19 pandemic. It noted that the alter­native to the debt exchange would be far worse economic crisis with protracted closure from international markets, including imported goods and services, and further domestic both for the real economy and the financial sector. It would also mean depleted fiscal resources to support the neediest.


It is recalled that individual bondholders were initially exempted from the Domestic Debt Exchange Prrogramme that the government launched on Monday, December 5, 2022.

However, the Finance Minister, Mr. Ken Ofori-Atta, in announcing the exemption of pension funds from the Debt Exchange Programme in re­sponse to recommendations by major stakeholders on December 22, 2022, said it would come at a cost.

It is important to state that the government has reached staff level agreement with its negotiation with the IMF for a three-billion-dollar bailout. Therefore, the amendment in debt Exchange programme is nec­essary to reach a Management and Board levels agreement with the IMF.


This latest development has sparked off threats of legal suit in court by individual bond holders against the government. According to the Vice President of IMANI, Ghana, an Economic Think Tank, Bright Simons, three groups rep­resenting individual bond hold­ers, have commenced mobili­sation to file legal suit against the government for including individual bond holders in the Debt Exchange Programme. He explained in a tweet that individual/retail investors to Ghana’s debt default would increase the risk of litigation.

While some of these individ­ual bond holders have threat­ened to commit suicide if the government fails to heed their call to rescind its decision of including their bonds on the debt exchange programme, since the benefits from that investments are the source of their livelihood and, therefore, taking them away from them mean, killing them softly, oth­ers have complained that profits from the bonds, are what they depend on to cater for their families, including their children’s school fees.

According to them, times are hard and the cost of living is unbearable, hence the profits from their invest­ment are what they use to cushion themselves.

A number of prominent personal­ities including the Majority Leader in Parliament have cautioned against this latest move to involve individual bond holders in the Domestic Debt Exchange Programme, saying it is dangerous for the country’s develop­ment.

According to Mr Osei-Kyei-Mensah Bonsu, the progamme could wipe out the middle class and negatively affect the savings culture of Ghanaians. He has suggested that the Finance Min­ister should properly engage with the major stakeholders.

The Minority caucus in Parliament has also called for total suspension of the Domestic Debt Exchange Pro­gramme and suggested a national economic crisis dialogue by stake­holders to discuss the whole issue, including the individual bondholders matter.


It is a fact that the economy is in a state of comma and our doctors will simply put it that it is receiving seri­ous medical attention at the Intensive Care Unit (ICU) at a medical facility with all the life supporting gadgets including oxygen and drips fixed on it. The moment, you dismantle these supporting gadgets, means death.

It is so sad that, managers of our economy have supervised the econ­omy to that extent of deterioration, despite other natural factors like COVID-19 and Russian-Ukraine war, which they have always relied upon to defend themselves anytime they are criticised.

What is amazing, is for the fact that our finest economists and fi­nancial analysts, keep giving pieces of advice to government that will help revamp the ailing economy, but because of political expedien­cies, these practical and reasonable advice and suggestions are constantly ignored and left in the burner, hence the situation we find ourselves at the moment.

What we have to do as a nation which is interested in building a sound and progressive economy to rub shoulders with other advanced nations in the world, is for us to unite and push party affiliations to the background and collectively pool ideas to build this country after all, this is the only country we have and nowhere else to go.


The people are, indeed, suffering in the midst of economic difficulties and other challenges. The cost of living is unbearable, prices of goods and services continue to escalate daily, inflation is terribly high, the cedi which appreciated against the United States of America (USA) dollar during the Christmas period is be­ginning to depreciate, fuel prices, although reduced a little is not the best, insurance premiums and other road worthy taxes are astronomically high.

In the midst of all these economic challenges, the government cannot continue to burden the citizens with policies that are inimical to their progress. That cannot be tolerated whatsoever in any civilised country such as Ghana.

The government should find alternatives to address the present economic challenges and stop these unnecessary ad hoc and indirect measures to mitigate the numerous economic problems.

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By Charles Neequaye

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