Ghana extends domestic debt exchange deadline for third time

Ghana's Finance Minister Ken Ofori-Atta speaks during a news conference in Accra
Ghana's Finance Minister Ken Ofori-Atta speaks during a news conference in Accra, Ghana December 13, 2022. REUTERS/Cooper Inveen

ACCRA, Jan 16 (Reuters) - Ghana has again extended the deadline to register for its domestic debt exchange, this time to Jan. 31, Finance Minister Ken Ofori-Atta said on Monday.

The crisis-hit nation launched the debt swap plan at the start of December, days before clinching a staff-level agreement with the International Monetary Fund (IMF) for a $3 billion rescue package.

"Building consensus is key to a successful economic recovery for Ghana," Ofori-Atta wrote on Twitter, adding that registration for the debt exchange would be extended "pending further stakeholder engagement".

The IMF has said its board will approve the deal only if Ghana undergoes comprehensive debt restructuring.

The deadline for the debt swap, initially set for Dec. 19, had previously been extended to Dec. 30 and then to Jan. 16.

Revisions to the initial offer granted exemptions to pensioners after a public outcry but later brought in individual bondholders who were originally exempt.

Unlike previous extensions, Monday's failed to offer bond holders any additional incentives. Without new terms, investors fear the programme could struggle to attract participants.

Meanwhile, repeated extensions and frequent structural changes have done little to encourage participation.

"(Ghana) wants to see voluntary applications and participation in the programme, but the sudden and often seemingly unexplained changes in the proposed DDE framework do not build confidence," said Gergely Urmossy, an emerging market strategist at Societe Generale.

Ghana last week offered to pay holders of its 2023 bond a 2% cash fee in exchange for registering for the exchange, but opposition to the programme has remained pervasive.

"Ghana spent a lot of money solving the problems it had with its banks from the 2014-2015 crisis, so you want to think very carefully to avoid jeopardising them," said Gregory Smith, emerging markets fund manager at London-based M&G Investments.

Ghana last week asked to restructure its bilateral debt under the common framework platform supported by the Group of 20 major economies, Reuters reported.

Reporting by Cooper Inveen and Christian Akorlie; Additional reporting by Jorgelina do Rosario; Writing by Sofia Christensen and Cooper Inveen; Editing by Estelle Shirbon, Alexander Winning, Kirsten Donovan and David Goodman

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