Saturday , 4 February 2023

What AG told Ofori-Atta on imposing Debt Exchange Programme on bondholders

The Debt Exchange Programme has been rolled out with government canvassing the “support” and “understanding” of all, especially bondholders, to cooperate to restore the macroeconomic stability. gathers that the Minister of Finance, Ken Ofori-Atta, had written to the Attorney General, Godfred Yeboah Dame, initially, seeking, inter alia, to impose the Programme on bondholders under Executive Instrument to be assented by the President by way of “emergency powers”.

In a reply dated Friday, November 18, the Attorney General advised government against such a move.

“The process of the government undertaking debt restructuring does not fall within the confines of articles 21 and 31 of the Constitution.

“Debt restructuring which may require the Government to vary terms of its bond agreements will not constitute an emergency situation permitting the President to invoke the emergency powers conferred upon him by the Constitution.”

Mr Yeboah Dame further explained: “Even though Governments are entitled to issue executive instruments or to take measures, as provided in Act 982 to address issues of unforeseen economic shocks, doing so to impose CACs on bondholders may amount to a unilateral modification of a bond agreement which is also the product of the exercise of an executive action of government in its commercial capacity.”

Mr Ofori-Atta was consequently advised by the AG to voluntarily engage with relevant parties in order to make the programme successful.

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