A straight no to the Debt Exchange programme could be detrimental to the efforts in resolving the economic challenges facing the country at the moment, a leading member of the governing New Patriotic Party (NPP) Gabby Otchere-Darko has said.
Mr Otchere-Darko indicated that Ghana is not sitting pretty regarding its economy hence, the country needs the debt exchange programme to succeed in order to help close a deal with the International Monetary Fund (IMF).
“What we are seeing with the mobilisation of agitation on individual bondholders poses a real and serious risk worse than what we witnessed when opposition to E-Levy succeeded in derailing an already shaky macroeconomic situation from 2021,” he said.
Mr Otchere-Darko further indicated that the debt exchange programme is voluntary for individual bondholders but a very necessary evil for our economy.
“Its success is critical to restoring macroeconomic stability, securing an IMF prog. It hits those of us holding bonds very hard. A straight no to it is no solution!
“If the no-compromise opposition to it wins, what then has been achieved? It may lead to national debt default. So what then happens to the value of your bonds after! Potentially worthless. If participation is low, we jeopardize resolving the economic crisis and hardships.
“I’m sorry but we have to face the hard/painful truths. We ain’t sitting pretty. Our focus must be on how the burden to individual bondholders may be possibly eased; but not to take the hardline position of simply saying no to participation. It will come back to hit us harder!” he said.
His comments come at a time persons such as the Majority Leader in Parliament, Osei Kyei-Mensah-Bonsu and also the Majority Chief Whip Frank Annoh-Dompreh have raised issues against the programme.
Mr Kyei-Mensah-Bonsu said that the progarmme could wipe out the middle class.
This, he said, is where the danger is hence, further engagements are needed.
He said these while speaking with a group of individual bondholders led by convener, Senyo Hosi and private legal practitioner Martin Kpebu when they submitted a petition to exclude individual bondholders from the debt exchange was presented to him on Friday.
The Suame Lawmaker said “What we [are] talking about is that many of these bondholders also belong to the middle class and that’s where the major worry is. If we are wiping away the middle class, that could be dangerous, so we need to have some further dialogue on this.
“Government thinks that this is the best way forward, however, even if it is, we need to engage, reflect and then move on and that will encourage some people who have some doubt to better appreciate where we are.”
“Nothing can substitute for discussions, round table discussions and engagements wherever we find ourselves in. I think it’s important that we go back to the drawing table to have engagements with the major stakeholders…All of us are in it. And if we don’t manage it well, we’ve gone through this before, way back some 25, 30 years ago and repositioning was a major, major difficulty.
“Today many people are coming on board and if this thing should happen, how do we build confidence and trust and reconstruct a new savings culture?”
Mr Frank Annoh Dompreh who is also the New Patriotic Party (NPP) Member of parliament for Nsawam Adoagyiri, Frank Annoh-Dompreh asked the Finance Minister Ken Ofori-Atta to review the decision to include individual bondholders in the programme.
He described the inclusion of the individual bondholders as unfair and untenable.
“The Finance Minister (Ministry) must as a matter of urgency review as soon as possible its decision and resolution on individual bond holders. I don’t agree with them and I think it’s unfair and untenable! Review your decision now,” the Majority Chief Whip tweeted.
The debt exchange programme also suffered rejection from Convener of the Individual Bondholders Forum (IBF) Senyo Hosi, who said that in an unfortunate oppressive fashion, the government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders.
In the process, the IBF said, Ghanaians have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable.
This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission,” a statement issued by Hosi said.
The Government of Ghana (GoG) announced that under its Domestic Debt Exchange (DDE) programme, individual bondholders were to submit to a “voluntary” arrangement to exchange their domestic bonds for new benchmark bonds.
This arrangement, according to IBF, irreversibly takes away the wealth and livelihoods of direct and indirect individual bondholders whose only crime has been to trust their government.
Tied to this is a mandatory deadline which compels holders to either accept the government’s offer or risk the threat of prohibitive losses, the Forum added.
It stressed “In an unfortunate oppressive fashion, government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders.
“In the process, we have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable. This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission.”
The Individual Bondholders’ Forum (IBF) is a voluntary group of individual bondholders established with defined governance structures to coordinate and defend the interests of individual bondholders in respect of the DDE program and to engage the GoG.