The bonds in question were issued in 2017 and 2018 to clear the energy sector's legacy debt, which had accumulated over the years due to a combination of factors, including poor management, non-payment of debts, and underpricing of electricity tariffs. The bonds were meant to provide a lifeline to the energy sector and enable it to meet its financial obligations to its suppliers and creditors.
However, the government has been accused of reneging on its obligations to bondholders, with reports suggesting that it has failed to pay interest and principal on the bonds as scheduled. This has caused anxiety among bondholders, who fear that they may never receive their full returns on investment.
In response to the Association of Finance Houses' statement, the government has issued a statement assuring bondholders that it is committed to fulfilling its obligations to them. The Minister of Finance has also pledged to meet with the bondholders to discuss their concerns and find a way forward.
The situation in the energy sector is a reflection of the broader challenges facing Ghana's economy, which has been hit hard by the COVID-19 pandemic and other macroeconomic factors. The government has been forced to cut spending and implement austerity measures to balance the budget and stabilize the economy.
However, these measures have had a knock-on effect on the energy sector, which relies heavily on government subsidies and support to stay afloat. The failure to pay interest and principal on the bonds has only compounded the sector's problems, raising questions about the government's commitment to the energy sector and its long-term viability.
In conclusion, the ultimatum issued to the Minister of Finance to pay all principal and coupons due to bondholders in the energy sector is a wake-up call for the government to prioritize the energy sector and address its financial challenges. The government must work with stakeholders to find a lasting solution to the sector's problems and ensure that bondholders receive their full returns on investment. Failure to do so could have serious implications for the energy sector and the broader economy.
