• Nana Ofori Owusu — Chairman of PPP
Nana Ofori Owusu — Chairman of PPP

Debt exchange programme: Exempt domestic bondholders — PPP

The Progressive People’s Party (PPP) says the government should exempt all domestic bondholders from its debt exchange.

It said the approach of government should be focused on developing a valuation model of debt restructuring to be auctioned on the secondary market.


“We advise that, if government will want to pursue debt exchange as a tool, it should learn lessons from the Chile and Mexico, who employed debt exchange programmes in the late 1980s as a strategy to address their debt burdens. None of these countries included domestic bondholders in their debt exchange and government must do same by exempting all domestic bondholders in the programme,” the Chairman of the PPP, Nana Ofori Owusu, said in an interview with the Daily Graphic.


According to him, “the model must be based on the assumption that, first, the country’s ability to service its external and domestic debt has increased, secondly, investors’ assessment of the probability of debt service payments being made in full has not changed due to increased ability to service the debt, thirdly, investors’ perception on the likelihood of interest payments being made on the new secured debt to be the same as the likelihood of interest payments being made on outstanding rescheduled debt and fourth, arbitrage will ensure that yields on unsecured restructured bonds of equal structure (coupon, maturity) will be equalised in the secondary markets.”

The PPP Chairman said those measures should be backed by sound economic management programmes particularly on government’s fiscal policies by cutting down expenditure, increasing revenue generation by expanding the tax net, increasing exportation, fighting corruption and advancing a rapid industrialisation programme which focused on big ticket items such as agricultural production and value addition, petrochemical industries, technological development and innovations, among others.

“The PPP believes such an approach will revive the economy, create more jobs, improve on the living conditions of the people and hope will be restored,” it said.


Mr Owusu believed that the debt exchange programme being forced on Ghanaians by the government was a product of an incompetent Finance Minister, Ken Ofori Attah, and wondered why he was still at post to impose such crude and cruelty of an economic recovery programme on the suffering populace.

The move, he said, was only a strategy to postpone government’s debt obligations and not in any way reduce the country’s debt levels and that “debt exchange in principle is a tool that offers the debtor the opportunity to match the contractual stream of debt service payments more closely with current and anticipated cash flows.”

“Ghana’s unsustainable debt level today originated from heavy borrowing by government since 2017, led by the Finance Minister who recklessly has brought the country to this stage where both domestic and foreign liabilities of the state have increased to astronomical numbers of over 100 per cent of Gross Domestic Product.

“Evidence from the 2023 budget statement shows the country is facing a balance of payment crisis, huge budget deficit, high depreciation of the cedi to major trading currencies, low revenue generation, high inflation rate,” he said.

The consequence of those on citizens, Mr Owusu said, were economic hardship, job losses and high cost of living and that as a result, government must demonstrate sensitivity and find better solutions by employing the best economic tools that will not impact negatively on the people.

“The answer to these problems is not a debt exchange which we believe will worsen the plight of affected persons,” he emphasised.

Connect With Us : 0242202447 | 0551484843 | 0266361755 | 059 199 7513 |

Like what you see?

Hit the buttons below to follow us, you won't regret it...