Wednesday, 22 May

DDEP: Gov't reaches deal with insurers

Ken Ofori-Atta - Finance Minister

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

A statement co-signed by the Finance Minister, Mr Ken Ofori Atta and the President of GIA, Mr Seth Aklasi, said under the agreement:

a. Insurance companies will participate in the Exchange on similar terms as the Banks.

b. That the government, through the solvency window of the Ghana Financial Stability Fund (GFSF), will support the insurance companies that are seriously affected by the DDEP. The objective is to protect jobs and the stability of the industry.

The GIA noted that it is happy to reach a deal with the government that protects its members but also enables the government to push through the necessary economic reforms during these difficult times.

This milestone on the back of the recent deal reached with the banking industry, according to the statement, has taken the government closer to completing the DDEP, which is a crucial factor in restoring economic stability and growth.

The Finance Ministry recently reached an agreement with the banks on the DDEP.

Bondholders will now enjoy a 5% coupon in 2023 which also translates into an effective coupon rate of 9%.

The agreement encompasses final improvements to the terms of the DDEP, namely:

a. An agreement to pay 5% coupon for 2023 and a single coupon rate for each of the 12 new bonds, resulting in an effective coupon rate of 9%.

b. Clarity on the operational framework and terms of access to the Ghana Financial Stability Fund (GFSF).

c. The removal or amendment of all clauses in the Exchange Memorandum that empower the Republic to, at its sole discretion, vary the terms of the Exchange.


Source: Mensah