ACCRA, December 22, 2010 (FBC) Ghana’s pension fund will be exempted from its domestic debt restructuring programme, according to a letter signed by a coalition of finance and labor ministers and trade unions on Thursday.
Ghana’s government has negotiated a staff-level agreement on a $3 billion loan package from the International Monetary Fund (IMF) to tackle the ongoing economic crisis.
The agreement will be approved by the IMF board only if Ghana undertakes comprehensive debt restructuring, the fund said.
The country announced a domestic debt-swap program earlier this month, and said external restructuring is being negotiated with creditors.
Labor and advocacy groups rejected the plan to include pension and mutual funds, whereby most Ghanaians invest in bonds. A general strike by the Ghana Federation of Workers has threatened to cut off pensions.
The Reuters letter, which the finance ministry confirmed as authentic, said the government and labor groups would “work together to explore mutually beneficial options within the constraints of debt sustainability”.
Pension funds accounted for 6 percent of Ghana’s domestic public debt of 181 billion cedis ($20.1 billion) at the end of September, according to data from the Central Securities Depository.
Abraham Kumson, the general secretary of the labor federation, who was present at the signing of the letter, said that following the agreement, all strike plans have been called off.
Kumson said the finance ministry agreed to release pensions from the program only if labor groups worked out some sort of alternative plan with the central bank.
Unions will begin engaging central bankers early next week, he said.
“The IMF wants this restructuring to happen, and the ministry has committed itself,” Komson told Reuters.
“The pension we wanted was separate (from the program), so in the future, if they want to come up with another option, we’ll be happy to help them,” Kumson said.
($1 = 9.0000 Ghanaian Cd)
Reporting by Cooper Inveen; Additional reporting by Rachel Savage; Writing by Nellie Peyton; Editing by Kirsten Donovan and Mark Porter
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