Economic Crisis: "Government placing too much emphasis on debt exchange" - Forum
Speakers at a public forum on Ghana's Domestic Debt Exchange Programme (DDEP) have accused the government of placing too much emphasis on restructuring debt in its attempt to tackle the economic crisis instead of employing fiscal consolidation and structural reforms as a cure.
According to them, the country must adopt a "triangular approach" of reducing domestic debt as well as fiscal and structural adjustments to tackle the economic crisis and secure a US$3 billion facility from the International Monetary Fund (IMF). It is hoped that the facility will stabilise the economy which is currently choked with debts totalling GH¢467 billion as of December 2022.
They argued that too much focus on debt restructuring was unfair because it loads the entire burden of fixing the economy on only a section of society.
The forum organised by the Economic Governance Platform today in Accra was themed: "Ghana's Debt Exchange Program in Context: Is it a make or break for an IMF Bailout or there are viable alternatives?".
A Speaker at the forum, Professor Godfred Bokpin said the government had presented the DDEP as the magic bullet for sealing an International Monetary Fund (IMF) programme but this was not the case.
"If we don't ensure the fair and equitable adjustment between fiscal, structural and debt restructuring then we will be burdening creditors unnecessarily and that is not fair," Prof. Bokpin said.
He said the challenges with the economy could rather be traced to poor governance structures that manifest later in economic mismanagement.
"Governance reform should be placed even higher ahead of fiscal, ahead of debt. Then the next layer should be a debt restructuring. We have turned it the other way round by saying that debt it rather the saviour".
He added that cuts could also be made in the size of government as well as the country's highly commercialised and monetized democracy.
An Economist and Senior Lecturer at the University of Ghana Business School urged all Ghanaian citizens to take an interest in the current economic crisis.
He called for a broader discussion on how the Ghanaian economy would be run after the next IMF programme.
The Director of Research of the Institute of Economic Affairs reiterated calls for an amendment to the current terms of the DDEP.
He called for a shorter maturity for funds that will be affected by the DDEP and a new coupon rate of between eight to 12 per cent on existing bonds.
He also called the abolition of the 4-year moratorium on the payment of principals.