Ghana will exempt pension funds from its domestic debt restructuring programme, according to a letter signed by the finance and labour ministers and an alliance of trade unions on Thursday.
Ghana’s government, in a bid to mitigate an ongoing economic crisis, has negotiated a staff-level agreement for a $3 billion loan package from the International Monetary Fund (IMF).
The deal will only be approved by the IMF board if Ghana undergoes comprehensive debt restructuring, the fund has said.
The country announced a domestic debt exchange programme earlier this month and said that external restructuring was being negotiated with creditors.
Labour and advocacy groups rejected the plan for its inclusion of pension and mutual funds, through which most Ghanaians invest in bonds. Ghana’s Federation of Labour threatened a general strike should pensions not be exempted.
The government and labour groups will “work together to explore mutually beneficial options within the debt sustainability limits,” said the letter seen by Reuters, which the finance ministry confirmed as authentic.
Pension funds held 6% of Ghanaian domestic public debt worth 181 billion cedis ($20.1 billion) at the end of September, according to data from the Central Securities Depository.
Abraham Koomson, the labour federation’s general secretary who was present for the letter’s signing, said that all strike plans have been dropped following the agreement.
Koomson said that the finance ministry agreed to drop pensions from the programme only if labour groups could arrange some sort of alternative plan with the central bank.
Labour unions will begin engaging central bankers as early as next week, he said.
“The IMF wants this restructuring to happen, and the ministry has already committed themselves,” Koomson told Reuters.
“All we wanted was our pensions detached (from the programme), so going forward, if they want to come up with an alternative, we will happily help them with that,” Koomson said.
