Debt Exchange Programme: Government reaches agreement with Ghana Insurers Association

The Government of Ghana and the Ghana Insurers Association (GIA) have reached an agreement on the participation of insurance companies in the Domestic Debt Exchange Programme (DDEP).

Under the agreement, insurance companies will participate in the programme on similar terms as the Banks.

This was contained in a joint statement issued by the Ministry and the GIA on Thursday January 26, 2023.

“That the Government through the solvency window of the Ghana Financial Stability Fund (GFSF), will provide support for the insurance companies that are seriously affected by the DDEP. The objective is to protect jobs and the stability of the industry,” a portion of the statement reads.

According to the statement, “The GIA is happy to reach a deal with the Government that protects its members, but also enabling the Government to push through the necessary economic reforms at this
difficult times.”

It noted that, “This milestone on the back of the success with the banking industry, has taken the
Government closer to completing the DDEP which is a key factor to restore economic stability and growth.”

On Monday January 23, 2023, government and the Ghana Association of Banks (GAB) made significant progress on the terms of participation of Banks in the Domestic Debt Exchange Programme (DDEP).

The new agreement encompasses final improvements to the terms of the programme.

These include; an agreement to pay 5% coupon for 2023 and a single coupon rate for each of the twelve (12) new bonds resulting in an effective coupon rate of 9%, clarity on the operational framework and terms of access to the Ghana Financial Stability Fund (GFSF) and the removal or amendment of all clauses in the Exchange Memorandum that empowers the Republic to, at its sole discretion, vary the terms of the Exchange.

This was contained in a joint statement from the Finance Ministry and GAB issued on Monday.

The Association of Banks said per the new terms, the participation of member banks is subjected to individual bank’s internal governance and approval processes.

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