Former Mark Assibey-Yeboah, a member of parliament for New Juaben South, has praised the government's domestic debt exchange program but claimed it is not comprehensive enough.
The proposal, according to the former chair of the Parliament's Finance Committee, is a more gentle method to safeguard investments while restructuring the nation's debt in preparation for the $3 billion International Monetary Fund (IMF) facility that the Government is attempting to get.
On Monday, December 5, Mr. Assibey-Yeboah said, "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."
The debt exchange program was started by the government as part of efforts to restructure the debt load of the nation.
The goal, according to Finance Minister Ken Ofori-Atta, is to "invite holders of domestic debt to voluntarily exchange approximately GHS137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic." This was stated during the program's launch on Monday, December 5, 2022.
The Minority Caucus in Parliament opposed the initiative, blaming President Akufo-Addo and his Finance Minister's financial dishonesty, and said that it would cause additional investor discontent and rob them of their returns on investment.
The seeking countries should restructure its debt before aid is awarded, according to Mr. Assibey-Yeboah on Eyewitness News, and this is the more moderate course of action.
"This debt restructuring is a requirement for the IMF Programme, therefore before we sign up for the Programme, we need to restructure our debt. In plain English, our debt has reached an unsustainable level, and we need to take action since we are unable to pay it back.
"The Government has acknowledged that the only way out of the current economic disaster is for us to enroll in an IMF programme. This has now become a requirement for enrolling in the programme, so if we don't restructure our debt, we cannot have the programme in place."
He continued by saying that the IMF does not instruct requesting nations on how to restructure their debt and that the government's establishment of an exchange program for holders of treasury bills and bonds is a commendable initiative that needs to be supported to clear the way for the beginning of the IMF's intervention.
"The debt restructuring process is between us and our creditors, so inasmuch as the Fund is demanding debt restructuring, they are not involved in the debt restructuring, they are sitting somewhere waiting for us to have the debt operation concluded before we can have the Program with them," the statement reads.