Reports indicate that over 90% of the GHS 3.9 billion Tier 2 pension contributions placed in government securities could be affected by the government’s debt restructuring programme.
According to reports, almost the entire pension funds of Tier 2 contributors have been invested in the Government of Ghana instruments, particularly bonds, given the fact that government securities are classified as risk-free investments.
The debt restructuring which is likely to affect the GHS 3.9bn Tier 2 pension contributions will be lead by the 5-Member Consultative Committee chaired by Albert Essien, and tasked to lead the financial sector stakeholder engagements in the debt restructuring programme towards reaching a deal with the IMF.
The Committee will examine views from financial sector players to deal with issues in the financial sector before reaching a deal with the IMF for an economic programme.
The debt restructuring by government is a pre-condition for a $3bn Balance of Payment support programme from the International Monetary Fund.
A debt restructuring implies that either the yield-to-maturity of government bonds and bills will be extended, or interest rates will be reduced or better still the ‘haircut’ policy will be enforced and this will potentially affect the returns on investments. In financial markets, a haircut refers to a reduction applied to the value of an asset.
