Debt Exchange wouldn’t be needed if govt had taken necessary drastic fiscal measures – Kwakye

The Director of Research at the Institute of Economic Affairs (IEA) Dr John Kwakye has said that the Domestic Debt Exchange programme that has been introduced would not be necessary if the government had embarked on drastic fiscal measures.

In his view, the government could have embarked on expenditure cuts and tax-enhancing measures to raise revenue, not the debt exchange.

“If we were prepared to take the necessary drastic fiscal measures, including expenditure cuts and tax-enhancing measures, the DDE would probably not be necessary.

“We can’t maintain our fiscal profligacy and expect bondholders to pay for it. The Gov’t must demonstrate its commitment to cut its coat according to its cloth,” Dr Kwakye tweeted.

Meanwhile, Finance Minister Ken Ofori-Atta has said his Ministry expects the joint technical committee that has been constituted to look into concerns raised by individual bondholders ahead of the rollout of the Domestic Debt Exchange Programme, to finish its work by 30 January to allow the programme to start.

He said the government wants to get the programme commence as part of moves to resolve the economic challenges.

Speaking to journalists in Accra on Wednesday, January 18 after a crunch meeting with the bondholders under the umbrella body Ghana Individual Bondholders Forum (IBF) on Wednesday, January 18, he said “I think the clarity for all of us is that it is a voluntary programme. We have anticipated maybe getting up to 80 per cent which will still put us under the parameter, so we are asking everybody to really join.

“The Forum reiterated their concerns which are legitimate concerns for all individuals and for the country at large. In the same way, in which we met members of the Pensions group, we set up a technical committee and they will be meeting immediately [Thursday, January 19], we don’t want to miss the deadline that we have set. We are confident that we will get there.

“The clarity for all of us is that it is a voluntary programme, we have anticipated getting up to 80 per cent which will still put us in the parameter so we are asking everybody to join.

“The government continues to be a government that cares for people, lives and livelihoods as we saw in Covid, we protected and going forward too we will protect but also ensure the Community of the Republic crosses the Jordan safely, that is the challenge we have.”

The Individual Bonholders Forum had petitioned the Minister to be excluded from the Programme, which has been scheduled to be rolled out after Tuesday, January 31.

They claimed they have not been adequately engaged by the government in an attempt to include their bonds in the Programme.

They accused the government of short-changing them especially as the Programme comes at a time a promise was made there will no haircuts to such investments.

By Laud Nartey|3news.com|Ghana