Government’s burden sharing appeal is burden transfer to Ghanaians – Economist
Economist and Senior Lecturer at the University of Ghana Business School (UGBS), Dr. Agyapomaa Gyeke-Darko has described the call by the Minister of Finance, Ken Ofori-Atta, for burden sharing as burden transfer.
According to her, government is not showing any commitment in supporting the debt sustainability programme, which is part of the conditions for an International Monetary Fund (IMF) bailout programme.
Mr. Ofori-Atta after announcing drastic debt restructuring measures appealed to pensioners’ bondholders to join government to share the economic burden currently faced by the country, by cutting on their returns from government bonds.
Dr. Gyeke-Darko emphasised the need for government to always spend within it means.
She argued that it is unfair for the Finance Minister to shift majority of the debt restructuring programme on ordinary Ghanaians when government is not ready to make any sacrifices.
“Are we going to be going on with the way we’re spending, or we are going to be sitting down and rationalising our expenditure? I hear the Minister of Finance speaking about burden sharing all the time, but I see it as a burden transfer, what is government actually doing to support these whole sustainability thing?” She quizzed.
The Thought Leadership programme, which was held under the theme “Debt Exchange and IMF deal; a do or die affair?” is aimed at discussing some of the critical concerns that came up after the Domestic Debt Exchange Programme.
She further stated that there is the need for government to demonstrate more commitment by cutting on expenditure to send a positive signal to Ghanaians.
On his part, a Financial and Investment Consultant, David Tetteh, who was also on the panel said the restructuring was shredded in mystery.
According to him, announcing a haircut and debt exchange at the time when people were expecting their coupon payments was a shock to many investors that could affect the economy.
The Debt Exchange Programme
The Ministry of Finance on February 14, 2023 announced that approximately 85% of bondholders participated in the Domestic Debt Exchange Programme (DDEP).
This amounted to ¢82,994,510,128 (¢82.99 billion).
“The Government is pleased with the results, as a substantial majority of the Eligible Holders have tendered,” a statement from the ministry said.
It added that the result is a significant achievement for the government to implement fully the economic strategies in the post-COVID-19 Programme for Economic Growth (PC-PEG) during the current economic crisis.
To provide sufficient time to settle the New Bonds in an efficient manner, the statement explained that government is extending the Settlement Date of the Exchange from the previously announced February 14, 2023 to February 21, 2023.