Bussiness
Individual bondholders threaten lawsuit over debt exchange programme
A group of individual bondholders are threatening to take legal action against the government for including them in the controversial debt exchange programme.
The group, known as the Ghana Individual Bondholders’ Forum in a statement signed by one of its convenors Senyo Hosi urged individual bondholders to reject and refrain from complying with the mandatory deadline imposed under the Domestic Debt Exchange (DDE) programme.
It further urged indirect bondholders such as investors in mutual funds, cash trusts, and balance funds to inform their fund managers not to accept the DDE.
It further advised government to open a channel of communication for “immediate frank, transparent and sincere dialogue on the DDE with the IBF with the view to seeking an effective resolution to the developing impasse and the fast-depleting confidence in the Ghanaian economy.”
“The medium- to long-term prospect and outlook of the domestic investment culture in Ghana is going to be affected by this DDE initiative and we call on government to demonstrate the needed sensitivity to enable a constructive resolution in the best interest of all,” it added.
The government in December disclosed that the group of bondholders who hitherto were exempted from the local debt exchange program will be included in the program.
The decision to include the individual bondholders was taken after the government yielded to demands by Labour Union to exempt pension funds from the debt exchange programme.
Ghana in December further extended the deadline to register for its domestic debt exchange to January 16 in order to “secure internal approvals” from the financial sector, according to the Finance Ministry.
The Ministry of Finance also announced a change to the debt exchange, with eight additional instruments to be created.
Under the original plan, local bonds were to be exchanged for new ones maturing in 2027, 2029, 2032, and 2037, with annual coupons set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity.
Announcing the latest extension, the Finance Ministry said that eight additional instruments would be created, bringing the total number of new bonds to 12, with one maturing each year from 2027 to 2038.
The Ghana Individual Bondholders’ Forum said the following in its statement:
Pending further consultations and engagements (including the pursuit of legal action where necessary),
we entreat as follows:
1. Direct Bondholders:
Reject and refrain from complying with the mandatory deadline imposed under the DDE program
and join the efforts of the IBF.
2. Indirect Bondholders (Investors in mutual funds, cash trusts, balance funds).
Inform your fund managers not to accept the DDE.
3. Government
Kindly open a channel of communication for immediate frank, transparent and sincere dialogue on the DDE with the IBF with the view to seeking an effective resolution to the developing impasse and the fast-depleting confidence in the Ghanaian economy.
Source: citinewsroom.com
Bussiness
Ghana’s GDP shows economy is fast recovering despite DDEP – Finance Ministry
Ghana’s Gross Domestic Product (GDP) indicates a rapid economic recovery despite global challenges and ongoing debt restructuring, according to the Ministry of Finance (MoF).
The Ministry in a statement today indicated that latest data from the Ghana Statistical Service (GSS), cumulative economic growth for the second quarter (Q2) of 2024 reached 6.9%, a notable increase from the 4.7% recorded in the first quarter of 2024.
The MoF statement further noted that, “The economy’s robust recovery is in response to the macroeconomic stability and growth interventions that government is pursuing under our IMF-supported Post Covid-19 Programme for Economic Growth (PC-PEG).”
According to them, the overall real GDP growth for the first half of 2024 rebounded strongly, with year-on-year GDP growth averaging 5.8% for the period, significantly higher than the 2.9% recorded in the same period in 2023.
By Edem Mensah-Tsotorme
Read full statement below
Bussiness
Facebook, Youtube, online trading companies must be taxed – Deputy Finance Minister
The Deputy Finance Minister Dr Alex Ampaabeng, has proposed that online trading companies should be taxed to bolster the economy.
He noted that these companies, both local and international, generate significant revenue from their Ghanaian clients, which underscores the necessity for taxation.
In an interview with Bernard Avle on Channel One TV’s The Point of View, Dr Ampaabeng pointed out various potential revenue sources for Ghana, including online businesses and content creation companies.
He questioned why other national companies operating in Ghana are taxed, but social media platforms like Youtube and Facebook, which run numerous advertisements, are not included in the Ghanaian tax system.
According to him, these social media companies earn profits from the advertisements they display, and online trading companies also generate income from the sale of their products and services.
He mentioned online trading companies such as Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.
According to him, “I can’t think of a country which has not gotten a digital service tax system of some sort, so Ghana is long overdue. Just to make an example so that people will appreciate where I’m coming from. Go to Youtube and play a video, within one or two minutes, you are going to watch about two, or three adverts.”
“What it tells you is that Facebook or Youtube is making profits right here in Ghana. Go to your Facebook account, and you are going to see a number of adverts on your right, left. What it is telling you is that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdiction reasons, of course, that are being taxed,” he said.
The Deputy Minister added that “So then, it comes to the question of the application of our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players, these are digital platform owners.”
He stressed, “Then we have the digital or market players, here we are talking about individuals who are using the digital platforms. We have Jiji, Jumia, Tonaton, these combined, are bigger than all physical marketplaces in Ghana. And it tells you the volume of transactions, that are going on there.”
He expressed his hope that individuals earning online profits from Ghanaian residents would be taxed.
“There are conversations ongoing, I wouldn’t want to pre-empt anything, maybe in the future, it might not be anytime soon, what I would like to see, is a Ghana where people who are earning all forms of profits in the country are subject to taxes. People who are trading online to Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.
Additionally, he proposed a collaboration with the government to curb cybercrime by registering and verifying these online trading companies.
“We can have a system where the government engages these operators, so individuals will submit their Ghana Card and are registered and verified,”he concluded.
Source: Citinewsroom.com
