GNAT, 5 others kick against debt exchange programme

Six labour unions have kicked against the imposition of cuts on pension funds as part of the debt exchange programme aimed at supporting the country’s economic recovery.

They include Ghana National Association of Teachers (GNAT), Ghana Registered Nurses and Midwives Association (GRNMA), National Association of Graduate Teachers (NAGRAT), Ghana Medical Association (GMA), Ghana Chamber of Commerce and the Trades Union Congress (TUC).

The unions have therefore vowed to resist any attempt by government to reduce the value of pension funds of their members which are in institutional bonds.

In a statement signed and issued by Thomas Musah, General Secretary of GNAT, the association said, it was not interested in any exchange of domestic notes and bonds by government, be it ESLA Plc, Daakye Trust Plc, adding that “our stance is non-negotiable.”

It noted that the Tier-3 Pension Scheme and the Ghana Education Service Occupational Pension Scheme (GESOPS), run for its members were initiatives taken by the association to better the lives of its members in active service, and retirement.

The statement said the financial schemes were intended to make its members live meaningfully saying that “it would be suicidal for the government to touch our funds and unruffle our teachers financially, both in active service and retirement.”

It cautioned, that the contributions and savings of teachers, should not be touched adding that failure to heed the caution would throw the country into industrial disturbances.

The statement said the association would fiercely and vigorously resist any attempt to touch the contributions and savings that would shortchange its members.

It urged the government to address the economic challenges facing the country not at the expense of the Ghanaian workers and the general population by being prudent in government expenditure, thrift, reduction in size of government, among others.

At a press conference in Accra, President of NAGRAT, Angel Carbonu, warned that if the government proceeds with its plan, union and other labour unions in the country would embark on an industrial strike. 

“We enter into a contractual agreement that I am buying bonds at ‘X’ per cent. So, I have informed the beneficiaries that I have bought bonds on their behalf at this rate. All of a sudden, government who is the party on the other side of the agreement comes to say, for me, this is what I can pay, take or leave it.

“This will not be accepted, NAGRAT and other teacher unions do not accept this. We are members of the forum made up of the public sector unions and we want to assure our members that we will resist this move by the government,” MrCarbonu stated.

Echoing similar views, the GMA, said the debt restructuring programme would have a negative impact on its members’ pension funds and healthcare delivery in the country.

“The GMA is also concerned about the negative effect of the debt exchange programme on private health facilities, private health insurance and mutual schemes that have invested heavily with Government of Ghana bonds.

This we believe will impact negatively on patient care, medication supply and claims management,” the statement added.

The GRNMA, also in a statement, described the move by government as unacceptable and rejected the programme.

“Pension funds are a collection of contributions of individuals. By design they are meant to protect the vulnerable during retirement. Thus any treatment of “individuals” as stated by the Minister of Finance must be indeed extended to all midwifery fraternity

“Pension funds, particularly Tier 3 schemes, were encouraged to hold their investments for a minimum of 10 years. Since its inception in 2012, most schemes have just met the 10 years or will be 10 years next year. Debt exchange for pension funds will mean that workers will not have access to Tier 3 funds after waiting for 5 – 15 years. This is simply unacceptable,” the statement added.

On their part, the Ghana Chamber of Commerce said the programme was injurious to the interest of contributors to pension schemes.

It explained that the move was in contrast with announcements made by President NanaAddoDankwaAkufo-Addo that there would be no haircuts on pension funds.

The TUC, in a statement, further stated that the group would analyse the propriety or otherwise of the participation of pension funds of its members in the programme.

“We are assuring workers, that the TUC and its affiliate unions will do everything in our power to ensure that our members are fully protected and that not even a pesewa of pension funds is lost in the debt restructuring programme,” it added.

Earlier this month, the Minister of Finance,Mr Ken Ofori-Atta, said that all bonds have been put into four categories as part of a restructuring programme that had been necessitated by recent economic headwinds.

He said individual bondholders and investors in Treasury Bills were exempt from the exchange programme.

“Under the programme, domestic bondholders will be asked to exchange their instruments for new ones.

Existing domestic bonds as of December 1, 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.

The annual coupon on all of these new bonds will be set at zero per cent in 2023, five per cent in 2024 and 10 per cent from 2025 until maturity. Coupon payments will be semi-annual,” he stated.


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