Opposes Debt Exchange Programme: TUC Argues It Jeopardizes Workers' Pension Security
Pension Fears Loom as TUC Slams Debt Exchange Program
The Trades Union Congress (TUC) is sounding the alarm over the government's proposed Debt Exchange Program, claiming it'll deal a heavy blow to workers' pensions.
After a deep dive into the Debt Exchange Program's potential repercussions, the TUC has unequivocally warned that the initiative risks jeopardizing the retirement income of employees.
In a fiery press conference yesterday in Accra, Secretary-General of TUC, Dr. Yaw Baah, bluntly stated: "TUC and our affiliate unions have decided that workers' pension funds will stand well clear of the Domestic Debt Exchange Programme."
Worried about the government's seeming disregard for labor in devising the plan, Dr. Baah noted that a considerable portion of workers' pensions is invested in government bonds.
Taking heed of the finance ministry's assertion that the program is voluntary, Dr. Baah vowed to safeguard TUC members from the program's reach. A letter has already been penned to Finance Minister Ken Ofori Atta urging the exclusion of all pension funds invested in government bonds from the Debt Exchange Programme.
The missive, penned on December 12, 2022, demands an announcement excluding all pension funds, including SSNIT, from the program within a week of its receipt. If government falters in meeting this demand, the TUC threatens a firm response.
Deadline for this response rapidly approaches, with Dr. Baah declaring that a follow-up presser will be held on December 19, 2022, to share the General Council's decision and any further action taken in case of government non-compliance.
Encouraging workers to prepare for any industrial action needed to protect pension funds, Dr. Baah declared boldly: "Workers will no longer shoulder the brunt of any IMF-inspired policies. It's up to the government to face the consequences of its decisions."
The Domestic Debt Exchange Program
Ghana's Domestic Debt operation, scheduled for implementation, aims to swap current domestic bonds for new ones maturing in 2027, 2029, 2032, and 2037. The annual coupon on these new bonds will be set at no interest in 2023, 5% in 2024, and a steady 10% from 2025 through maturity. The program won't touch individual bondholders.
Given the TUC's history of defending workers' rights and benefits, it seems plausible that it would closely scrutinize any economic initiatives that might potentially afflict worker pensions, such as the Domestic Debt Exchange Program. If the program entails restructuring or devaluing government bonds, which could have disastrous consequences for pension funds, the TUC might escalate its opposition and advocate for measures to shield workers' pensions.
- The Trades Union Congress (TUC), having conducted a thorough financial analysis of the impact of the Domestic Debt Exchange Program, has warned that the program's potential consequences may jeopardize the retirement income of workers.
- In light of the TUC's objection, a letter has been written to Finance Minister Ken Ofori Atta, urging the exclusion of all pension funds invested in government bonds from the Debt Exchange Programme, with the threat of industrial action if the demand is not met.
- While the government asserts that the Debt Exchange Program is voluntary, the TUC's concern lies in the fact that a considerable portion of workers' pensions is invested in government bonds, and any restructuring or devaluing of these bonds could have disastrous effects on pension funds.
- As the program introduces new bonds with varying interest rates, the TUC's interest in finance, business, and general-news sectors will likely continue, given the potential implications for workers' pension funds and the broader economic landscape. The approaching deadline for the government's response means political maneuvering and potential trade negotiations may also be on the horizon.
