Economist, Professor John Gartchie, has indicated that government’s debt restructuring might delay negotiations with the International Monetary Fund (IMF).
According to him, if measures put in place are not satisfactory, it will probably trigger a delay in negotiations.
The government has announced modalities of a domestic debt exchange following the conclusion of Debt Sustainability Analysis as part of negotiations with the International Monetary Fund (IMF).
Speaking in an interview with Samuel Eshun on the Happy Morning Show, Professor Gartchie indicated that, there is no law government can employ to compel citizens to accept the policy.
“I believe there is no law that would do that. We are not in a war situation or pandemic so I’m wondering which law the government would use to compel people to bow down to this debt restructuring programme,” he said.
He furthered that, ”If there is a law that is going to be used, it will only prepare Ghanaians to go against government instrument in the future. So, it has a very dire consequences for the financial market and the mobilization of funds for development.”
Ghana’s Domestic Debt Exchange Programme has been launched to put the country’s debt on a sustainable path.
The debt restructuring will see a slash in interest payments for domestic bondholders to zero percent in 2023 and five percent in 2024.
Existing domestic bonds as of December 1, 2022, will also be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037 – all in a bid of restoring the nation’s capacity to service its debt.
Under the programme, however, treasury bills and individual bondholders will not be affected while there will be no ‘haircuts’ on the principal of bonds, government said.
The debt exchange programme, seeks to classify domestic bonds into four categories to create fiscal space as part of preparations to qualify Ghana for an IMF facility.
By: Miriam Akuetteh
