Don’t compromise support for debt restructuring

Yesterday, we dedicated our editorial to joining the government in calling for support for the restructuring of its domestic debts.

We called on the government to fix all vagueness regarding the exercise for stakeholders to understand what the exercise entails and what they can do to help ensure its success.

We are forced to revisit the issue of support because of the reactions to the details of the exercise some of which can discourage the much-needed support, even though they are meant for good.

It is now clear that the exercise has produced two groups – one that thinks the government is not clear about issues, which is a way of shortchanging the investing public; and the other that supports the move by the government and believes no one will get cheated by any way possible.

For instance, the Minority in Parliament and others like the Dean of the School of Business, University of Cape Coast, Prof. John Gatsi, think the government’s Debt Exchange Programme will certainly result in “haircuts” for domestic creditors, something the government denies.

However, the professor’s explanation makes a lot of sense for the ordinary man.

He says the elongation of maturity dates of bonds and review of coupon rates, determined by government, the debtor itself, a move he describes as “imposition”, would lead to creditors losing the value of their investments.

He says the zero interest rate in the first year of the programme represents “clear inherent haircut and not a good deal for creditors”.

He, however, quickly departs from the earlier position to say that despite its negative impact, the programme would give the government some respite in terms of debt payments and also meet one of the conditions for economic support from the International Monetary Fund.

The Trades Union Congress has expressed concern about the programme for its potential negative impact on workers’ pensions, a fear the government has already parried.

As for the Minority, they say they are completely opposed to the programme because the government failed to capture its details in the 2023 budget presented to Parliament on November 24.

They maintain that the programme would further exacerbate the suffering of Ghanaians.

We think all the positions advanced against the debt restructuring exercise are as good as those for it.

We believe those against it are for the correction of the portions that can create problems.

Therefore, the government should see all the criticisms as good for its own success.

To this end, it should be prepared to consider them and possibly seek more ideas from those making them.

Thus, we would like to appeal to those opposing the programme, particularly the Minority, to avoid entrenched positions and be prepared to assist the government when called upon to do so.

This is not the time to be confrontational but one in which the good of the country and the people must be the priority, because the current hardship is being borne by all Ghanaians.

It is clear that the success of the exercise would help the restoration of the country’s economic fortunes, for the people to enjoy some relief.

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