A proposed town hall meeting slated for Monday, December 14, 2022, spearheaded by the Securities and Exchange Commission (SEC), together with the Ghana Securities Industry Association (GSIA), to “discuss recent market developments” has been postponed indefinitely.
The postponement was conveyed in a communiqué from the SEC on Friday, December 9, 2022, with a new set yet to be announced.
The SEC had, in an earlier invitation, indicated that the primary focus of the meeting was to address concerns over the Fair Value through Other Comprehensive Income, or mark-to-market approach to valuing securities.
“Following the issuance of a Directive, Frequently Asked Questions Public Notice on the use of the mark-to-market valuation method in the valuation of investment assets/securities and portfolios in the securities sector, the SEC and the Ghana Securities Industry Association (GSIA) will be holding a joint town hall meeting,” the SEC stated.
Investors have been agitated since the issuance of the directive in November 2022 over concerns that they are being subjected to losses on their holdings, similar to what is expected from the impending government-led public debt restructuring. The SEC has said it is not the same.
Heightened concerns
While no reason for the postponement was explicitly given, it might not be unrelated to developments elsewhere in the domestic market.
Since preliminary details of the Ghana Domestic Debt Exchange Programme emerged when the Finance Minister, Ken Ofori-Atta, addressed the nation on the evening of Sunday, December 4, 2022, there has been a push back by key stakeholders to his proposals to issue four new bonds to replace existing debt instruments with no coupon payments in 2023, 5 percent in 2024, and 10 percent, until maturity.
The primary groups that have so far refused the current terms, which include the minority caucus in Parliament, the Ghana Registered Nurses and Midwives Association (GRNMA) and the Technical University Teachers Association of Ghana (TUGAG), have cited the potential effect of the measures on the pension contributors.
This sentiment was amplified by the Chamber of Corporate Trustees, which said while it recognises the need for burden-sharing to recalibrate the nation’s debt stock, it would be reneging on its fiduciary responsibilities, even as confidence is significantly damaged.
“The Pensions Chamber would like to assure contributors to pension schemes that the industry has not agreed to the debt exchange programme proposed by the Ministry of Finance. As Trustees, we hold a fiduciary responsibility and are enjoined to seek the best interest of contributors at all times.
“We encourage all contributors to pension schemes to seek further information from their pension providers/administrators as we engage further with the government for an improvement to terms of the restructuring,” a statement signed by its Executive Secretary, Thomas Kwesi Esso, read.
The Chamber further entreated contributors to pension funds and actors in the pensions industry to remain calm as it continues negotiations with the Finance Ministry.
Despite assurances by the Financial Stability Council that sector regulators will employ a range of measures to guarantee the integrity of the sector is preserved, players have expressed their misgivings.
The afore-mentioned GSIA, in a statement, said: “We, at the GSIA, understand the difficult crossroads at which our nation currently finds itself and the difficult choices that need to be made to set us on the path to debt sustainability. However, we are unable to accept the bond exchange programme announced by the Minister of Finance in its present form”.
With the December 19, 2022 deadline approaching, there appears to be a race against time for voluntary buy-in.
