He said the programme is not deep enough to solve Ghana's economic mess.
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Govt's debt exchange programme not enough — Former NPP MP Assibey-Yeboah
The former New Patriotic Party (NPP) Member of Parliament (MP) for the New Juaben South constituency in the Eastern Region, Dr. Mark Assibey-Yeboah, has lauded the government's Domestic Debt Exchange Programme.
Mark Assibey-Yeboah
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"I will even say that the exercise has not been deep enough because from what we are hearing, individual bondholders are excluded, and there are no haircuts on the principal as it were and there have been some concessions if you like, so I think this is the softer way to go," Assibey-Yeboah said on Citi News.
His comments follow the government's move to rely on a softer payment plan with institutions and individuals who have lent money to the country as part of efforts to reduce the burden the public debt stock puts on the economy.
The plan, which is in line with the government's commitment to restore macroeconomic stability in the shortest possible time, involves the swapping of existing domestic bonds with longer-dated bonds that will take between four and 14 years to mature in 2037.
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Minister of Finance Ken Ofori-Atta announcing the programme said Ghana is facing a very challenging economic situation amid an increasingly difficult global economic environment, marked by the COVID-19 pandemic, the global economic shock created by the Russian invasion of Ukraine, and disruptions of the global supply chains.
He said for the government to alleviate the debt burden in the most transparent, efficient, and expedited manner, treatment of domestic debt is necessary adding that the invitation does not entail any reduction in the principal amount (haircut) of the eligible bonds which involves an exchange for a new government of Ghana bonds with a 0% coupon in 2023 that steps up to 5% in 2024, and 10% from 2025 onwards.
Mark Assibey Yeboah on his part said the programme is a softer way of protecting investments while restructuring the country's debt ahead of the $3 billion International Monetary Fund (IMF) facility that the Government is seeking to secure.
He stated that as part of the requirements for securing an IMF facility, the requesting country ought to restructure its debt before help is granted and this is the softer way to go.
"The IMF Programme is dependent on this debt restructuring, so before we can sign up for the programme, we need to restructure our debt. Our debt has become unsustainable, in simple terms, we simply cannot repay our debts, and we have to do something about it," he noted.
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Meanwhile, the Ghana Registered Nurses and Midwives Association (GRNMA) has rejected the government's debt exchange programme.
According to the association, the government denying pensioners access to their tier 3 funds after 5-15 years of waiting for maturity on their investments is unacceptable.
The association in a statement signed by the President, Perpetual Ofori Ampofo, described the debt exchange program as unfair since their pensioners will bear the brunt of the government’s fiscal indiscipline through the debt exchange programme.
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