The Vice President of IMANI Centre for Policy and Education, Bright Simons, has outlined seven reasons why the debt restructuring announced by Finance Minister Ken Ofori-Atta, is struggling to be accepted by bondholders.
The government has introduced a domestic debt exchange programme and suspended the payment of some of its external debt.
The debt exchange programme has already recorded some resistance from various labour unions.
Several labour unions have kicked against the imposition of cuts on pension funds as part of the debt exchange programme.
Organised labour has threatened a public sector shutdown by December 27 if its concerns over the programme are not addressed.
Delivering a presentation during Ghana’s debt restructuring Forum organised by Citi TV/Citi FM in collaboration with ACEP and IMANI Africa, Bright Simons said the lack of stakeholder consultation and the skewed burden sharing are some of the reasons why bondholders will struggle to accept the government’s proposal.
Bright Simons also blamed the government’s inconsistent narrative and the failure to properly explain to the ordinary Ghanaian whether there are haircuts on their investments as a major factor for the confusion surrounding the entire debt restructuring process.
Bright Simons’ Seven reasons for the struggle of the debt exchange programme
- No stakeholder consultations
- Skewed burden sharing
- Share of fiscal adjustment unclear
- Fear of serial defaults
- Credit enhancements
- Lack of legislature
- Consistency of government narrative
The event is on the theme “Ghana debt saga: Now what next?”
The forum moderated by Vivian Kai Lokko, the Head of News at Citi TV/FM had speakers such as David Ampaw, an international restructuring lawyer, Mavis Owusu Gyamfi, a political economist and Senyo Hosi, an investor and economic policy analyst.