Debt programme outrageous, it’ll push more people into poverty – John Mahama
Former President, John Dramani Mahama, has taken a dig at the government accusing it of lying to individual bondholders on the Domestic Debt Exchange Programme.
According to Mr. Mahama, the programme will force a ‘haircut’, which has the propensity to plunge more Ghanaians into poverty.
Government in December 2022 hinted that individual bondholders who were previously exempted from the Debt Exchange programme will be included, extending the deadline for registration to January 16, 2023.
The decision the former President said is a failure on the part of the government in its management of the economy, describing the Debt Exchange Programme as outrageous.
“Outrageous! Gov’t lies to individual bondholders; forces a haircut, and plunging more people into poverty! An absolute failure in managing our economy,” the former President tweeted on January 12, 2023.
Background
Ghana announced a Domestic Debt Exchange programme on December 2022, and said that external restructuring was being negotiated with creditors.
The Ministry of Finance, in a statement, explained that, the extension date comes on the heels of the announcement of the Staff Level Agreement (SLA) between the government and the International Monetary Fund (IMF) on December 13, 2022.
The ministry had previously extended the registration deadline for the domestic debt exchange to December 30, 2022 from December 19, 2022 originally.
“This extension affords the government…the opportunity to consider suggestions made by all stakeholders with the aim of adjusting certain measures,” the Finance Ministry said in a statement on December 17, 2022.
Under the original plan, local bonds were to be exchanged for new ones maturing in 2027, 2029, 2032 and 2037, with annual coupons set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
However, the Finance Ministry said that eight additional instruments would be created, bringing the total number of new bonds to 12, with one maturing each year from 2027 to 2038.
It was not made clear what coupon values the new bonds would hold.
The announcement also said that individual bondholders would now be invited to participate in the programme, despite their initial exemption.
Source: citinewsroom
