Speakers at a public discussion on Ghana's Domestic Debt Exchange Programme (DDEP) criticised the government for prioritising debt restructuring above fiscal consolidation and structural changes in its effort to address the economic crisis.
In their view, the nation must take a "triangular strategy" to deal with the economic crisis to get a US$3 billion facility from the International Monetary Fund. This involves cutting domestic debt as well as making fiscal and structural improvements (IMF). It is envisaged that the facility would stabilise the economy, which is now strangled by debts that, as of December 2022, will amount to GH467 billion.
They said that putting an excessive amount of emphasis on debt restructuring was unjust since it places the whole weight of reviving the economy on only a small portion of society.
Forum
Ghana's Debt Exchange Program in Context: Is it a make-or-break for an IMF Bailout or are there feasible alternatives? was the focus of the event that the Economic Governance Platform hosted today in Accra.
Speakers
Professor Godfred Bokpin, one of the speakers at the event, claimed that the administration had misrepresented the DDEP as the solution to securing an IMF programme.
According to Prof. Bokpin, if we don't provide a fair and equitable adjustment between fiscal, structural, and debt restructuring, we would be burdening creditors unduly.
He claimed that rather than being caused by economic incompetence, the problems with the economy may be attributed to weak governance systems.
"Even more so than finances or debt, governance change should come first. A debt restructures should then come as the following layer. By claiming that debt serves as the saviour instead of the burden, we have reversed the situation ".
He continued by saying that the size of government and the nation's heavily commercialised and monetized democracy might both be reduced.
All Ghanaians were asked to show interest in the present economic crisis by an economist and senior lecturer at the University of Ghana Business School.
He urged a wider debate on how the Ghanaian economy will be managed under the next IMF programme.
The Institute of Economic Affairs Director of Research renewed requests for changes to the DDEP's existing provisions.
He demanded a shorter maturity for funds impacted by the DDEP and a revised coupon rate on outstanding bonds of between 8% and 12%.
He also demanded that the four-year prohibition on principal payments be lifted.
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