Reality of haircut
A few years ago, one of my sons returned home on vacation with a weird haircut. I immediately took him to a Barbershop to have the haircut "amended" to give him a more respectful and decent look.
I never thought of that episode again until recently when this issue of haircut became topical in our dear country. Naive as l am on issues of banking and economics, it took me a very long time to come to terms with what this whole haircut business is all about. At a point, l even thought the process would involve the physical shaving of our President and his Vice. I wondered if the two needed any haircut at all since the Lord is their barber.
Coming to the reality of the haircut situation facing our country presently, l cannot but conclude that this haircut to include individual bondholders is unfortunate. The consequences of this "by force" haircut will have dire effects on the bondholders in particular and the banking sector in general. As it seems now, bondholders are being dragged involuntarily to the barbershop for a haircut they have not asked for.
Bad as the situation is, some government spokespersons, by their utterances, are adding insult to injury. Let these spokespersons be measured in their utterances so as not to inflame passions. How did we get into this unfortunate situation in the first place? Is it smart borrowing turned reckless borrowing? What about our expenditure pattern? Can't we cut down on government expenditure?
Let us think through this haircut process carefully to avoid another banking sector crisis. As for the erosion of confidence in our banks, it is a foregone conclusion .
Mark Kofi Logo, Assistant Commissioner (rtd), Customs Divisions, Ghana Revenue Authority, Accra.