DDEP: President Nana Addo Dankwa Akufo-Addo must be ashamed for slapping bondholders with haircuts on their investments despite promising not to do so earlier.
Dr. Yao Graham, coordinator of the Third World Network Africa, holds this viewpoint.
He thought that the President’s comment should have been more of an acknowledgement of the current economic crisis and an appeal for everyone to help Ghana reach a level of public debt that is manageable.
“The President’s broadcast in which he stated that there would be no haircut must have embarrased him. In my opinion, it should have been stated in that speech that there is a crisis that will necessitate sacrifices from all of us and force the government to reevaluate how it conducts business in order to reduce public expenditures. That makes sense. Everyone is on board with that. Although it won’t be easy, it would have improved the climate, he stated on Citi TV’s Point of View.
Dr. Yao Graham believes that the highly contested Domestic Debt Exchange program in its current form is detrimental to politics.
He also says that the Finance Minister is to blame for how poorly the program was handled because he didn’t talk to important people in the industry, and the government should be ashamed of this obvious example of incompetence.
“Really, the Finance Minister has been extremely arrogant, particularly in his interactions with this exercise’s victims. He also demonstrated incompetence by changing the dates and terms, indicating that he did not properly plan and engage. Even more embarrassing is this. The DDEP has seriously undermined this government’s legitimacy. Additionally, it is a political disaster.
The domestic debt exchange program was implemented by the government to give it more time to meet its fiscal obligations after an economic downturn and difficulties servicing its debt.
According to the government, the nation will experience a severe economic collapse without the debt exchange program.
The Ghanaian government’s completion of the debt restructuring is another condition for the International Monetary Fund’s $3 billion rescue package.
“Getting to a debt level that is sustainable is necessary, but many will advise against domestic debt restructuring due to its systemic implications for the nation. Therefore, the most important thing to keep in mind is your external debts,” Dr. Graham continued.
There have been protests and pleas to exclude certain types of bonds from the debt swap program, despite the government’s reaffirmation that participation is completely optional.
Pensioners and the banks’ resistance reveal the ramifications. We need to look at public finance because we need to front-load the debt exchange as the first step and are very resistant to legitimate citizen demands; how much money is coming in, how it is used, and how things can be put off. It is very striking to observe the resistance to that conversation.
The President is prioritizing funding for a national cathedral in all of these endeavors. People are aware of waste and corruption, but there does not appear to be any discussion about how to get them to be willing to make sacrifices. That doesn’t start to build trust, and if you want people to make sacrifices, you need to build trust in your program,” the coordinator of the Third World Network Africa added.
