It is clear from all the talking by the experts, organised labour, financial institutions and others the government debt restructuring would directly impact that the dust hovering over the exercise is not going to settle now.
The views being expressed everywhere against the exercise clearly show that either there were no consultations with the institutions and even big individual stakeholders or there were but not broad and intensive enough to convince them.
Meanwhile in places like the Dominican Republic and Jamaica, where debt restructuring has taken place before, credible and transparent communication strategy was adopted for the targeted stakeholders to understand and embrace the exercise and this ensured its success.
From the government perspective, it has adopted a credible policy reform exercise which is going to hugely help put the country’s crisis-hit economy back on track and some of us have no grounds to doubt that position.
This is becausethe country has adopted certain strategies before which can be described in a way as debt restructuring, which became successful.
For instance, in 2007 Ghana became the first West African nation to issue a 10-year Eurobond worth $750 million whose demand exceeded the target by 8.5 percent.
It could be that because that was an exercise opened to the international market, the arrangements were different, hence the overwhelming acceptance.
The only woe about that exercise was that the country’s accumulated debt grew, making interest payments come to account for a greater portion of government outlays, leading to debt restructuring programmes to reduce near-term payment obligations.
However, whatever the situation was, some lessons could be learnt from that exercise which caused other African countries, particularly sub-Saharan economies, to follow Ghana’s initiative.
We can also refer to restructuring exercises by other countries and as well learn lessons from them.
It is said, for instance, that since 2004, there have been eight episodes of sovereign debt restructuring in six Caribbean countries—Antigua and Barbuda, Belize, Dominica, Grenada, Jamaica, and St. Kitts and Nevis; with others in Guyana, Suriname, and Trinidad and Tobago.
Even though those of the Caribbean economies are described as having not yielded lasting gains, those of Guyana, Suriname, and Trinidad and Tobago succeeded in helping to lower public debt.
Definitely certain factors contributed to success levels in the two case brackets.
In the face of all these, the Ghanaian Times would like to urge those looking at only the negative side of the debt restructuring the government has planned to start in 2023 to go for the positive side also and weigh the two to make informed public pronouncements in order not to cause panic among the investing public.
It is equally incumbent on the government to explain the issues well to clear the air about pension, insurance and other investment funds believed to have *been touched already, so it is all good that the Finance Minister says the government would have engagements with stakeholders.
How are the insurance companies, for example, going to pay salaries and claims when they are going to earn zero per cent interest on their investments in 2023, a paltry five per cent interest in 2024 and 10 per cent from 2025 until maturity in 2037?