Government Bondholders In Trouble




The Ramifications/ Reality for some Ghanaians who have purchased GOG Bonds

My Piece and highlights on the “ Debt Restructuring Program”

Debt Restructuring is when debt is deferred for a period time.

It was announced last year by the finance Minister in the 2023 budget about “ a debt Exchange Program”.

The Finance Minister said to us that Treasury Bills are exempted and all holders will be paid the full value of their Investment on maturity. He also said that there will be no haircut on the Principal of Bonds, I totally disagree with him exemptions of the Treasury Bill.

Individuals holders of bonds will be most affected , I assume this to be a “ Stephen Johnson Syndrome “ of economic lies.
Before I proceed , is better communicators do understand some terminologies for broader - understanding;

1. Haircut: Is the difference between the current market value of an asset and the value ascribed to the asset for the purposes of calculating regulatory capital or loan collateral. The amount Of haircut reflects the risk of the assets falling in Value In an immediate cash Sale.

2. Bond : Simply a loan taken out by a company, instead of going to the bank, the company gets the money from investors who buy it bonds. In exchange of capital, the company buys an interest coupon , which is the annual interest paid.

3. Coupon Interest: the rate of interest paid to the holders of a bond. This can either be a floating variable/fixed rate.

4. Fixed Deposit: In a fixed deposit, you put lump sum in your bank for a fixed tenure at an agreed Rae of interest, at the end of the tenure, you receive the amount you have invested plus compound interest.
We normally invest or have government bonds for future interest or the money invested for other developmental projects in our daily lives .
The Negative Concomitant effects on Government Bond holders such as the Banks, individuals, Pensioners , companies are as followers;

- Interest rates due to Bondholders in 2023 will expropriated, meaning there will be no interest for everyone who invested with the government of Ghana (GOG) via bonds. This means that if you invested 20,000.00 with GOG, there will be no interest for you in 2023 but 1,000.00 Interest in 2024 and 2,000.00 interest in 2025.

- Many Bondholders will suffer from depression and die prematurely as they will be unable to access their accrued interest in 2023.

- Companies that purchased bonds to fund future business expenses with Principal payments will be unable to do so from 2023 until 2027, this will lead to a negative higher demand of the companies productivity hence lay-off staffs.

- A pensioner who owns Government of Ghana (GOG) bond will receive its full Principal in 12 years , what if he or she dies before the 12 years.

- Holder Of Bonds Maturing In 2023 will receive coupon payment starting from 2027-2033, hahahahahahahaha

- Holder Of Bonds Maturing In 2024 will receive coupons starting from 2027 - 2038.
This approach looks much more than crypto investment or NAM1 investment.
No wonder our economy is now equivalent to US Tilapia Investment.

Story by: Aikins Ofori
Tel: 0594282316

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