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Mandatory Debt Exchange Program Would Be Illegal – Attorney General Tells Finance Minister

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Ghana’s Attorney-General and Minister for Justice, Godfred Yeboah Dame has warned government any mandatory debt exchange program would be illegal.

Finance Minister Ken Ofori-Atta yesterday announced domestic bondholders with the exception of Treasury bill holders will be affected by the debt exchange program.

Per the arrangement, bond holders will get 0% interest in 2023, 5% in 2024 and 10% onwards. The bonds will also be redeemed in 3 instalments within 10 years.

According to documents sighted by TodayGhanaMedia.com, the Attorney General advised against any unilateral variation of collective agreement clauses, (CAC).

The AG in his legal advice to the finance minister asked for domestic bondholders to be engaged before any such move. According to the AG the debt exchange program can at best be voluntary given the legal ramifications.

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“In the absence of an agreement with parties, it would be unlawful for the government to unilaterally introduce CACs into bond agreements and may constitute an event of default under clause 12 of terms and conditions of the bond issued under the programme” Mr. Dame stated in his advice.

“Voluntary engagement with parties to bond agreements would be able to produce the outcome of a voluntary modification and inclusion of CACs on bondholders” he added.

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Eventhough government has announced the debt exchange program is voluntary in accordance with the advice from the AG, Member of Parliament for Bolgatanga Central Isaac Adongo has consequently asked affected bondholders to proceed to the law court given the decision by finance minister Ken Ofori-Atta to ignore the legal advice of the Attorney General.

“Ken Ofori-Atta ignored the express legal opinion of the AG to illegally and unilaterally shred binding terms of the bond agreements in the debt exchange program. Affected bondholders must proceed to court” Mr. Adongo wrote on social media.

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The Chamber of Corporate Trustees has already rejected the debt exchange program announced by the finance minister. In a statement, the Pensions Chamber assured pensioners it has not agreed with government on the debt restructuring moves.


Find below the legal opinion of the AG on the debt exchange program







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