The Minority in Parliament has described as unacceptable the form and structure of government’s proposed debt restructuring programme announced.

According to the minority, it will kick against the policy and cannot be allowed to proceed. The Minority Leader, Haruna Iddrisu, indicated that his side will use every legitimate means to oppose the move.

“Let me state without any fear of contradiction that the form and structure of the debt restructuring announced by Finance Minister Ken Ofori-Atta this morning are unacceptable to us and we simply will not accept it.”
Haruna Iddrisu

Speaking at a press conference in response to government’s debt restructuring plans, Mr Iddrisu questioned why the debt restructuring plan was not included in the 2023 budget. Owing to this, he explained that the concern of the Minority is that the announcement by the “Minister of Finance this morning has dire consequences on government and Ghana’s financial sector”.

“It has dire consequences on jobs and dire consequences on pensions and dire consequences on loans; we are compelled by legislation to investigate at least 75 per cent of government instrument and government bonds. We expected government to have thoroughly engaged and consulted before making this far-reaching announcement.”
Haruna Iddrisu

Minority raises concerns over debt restructuring

The Tamale South legislator iterated the minority’s concerns over why the contours of the debt restructuring plan were not included in the 2023 Budget Statement presented by the Finance Minister in his recent address to the House.

“Were investors consulted, were bondholders consulted, and how did he come to this conclusion?”
Haruna Iddrisu

The Minority leader revealed that the Finance Minister restructuring the terms of a loan agreement without approval from parliament is contrary to the 1992 constitution and will be rejected by his caucus.

His comments followed the finance minister’s comments regarding government’s debt restructuring plans today, December 5, 2022. Mr Ofori-Atta among other things, indicated that Government expects overwhelming support for the debt exchange programme that has been introduced in the 2023 budget.

In his view, the programme is the surest way of restoring the Ghanaian economy back on track to create jobs and protect income of the people.

Launching the programme in Accra, he stated that the debt exchange programme “is an orderly way to put our economy back on track in order to create jobs, protect income and restore hope to the Ghanaian people”.

It will be recalled that in a public address on Sunday, December 4, on the current economic situation, the Finance Minister, Ken Ofori-Atta stated that the government will ensure that people’s investments are safe. He further announced that interest payments for domestic bondholders for 2024, will be pegged at only 5% adding that from 2025, the rate increases to 10%

These measures include some exemptions and external debt restructuring parameters that will be implemented.

Per his release, treasury bills and individual bondholders will not be affected by this exercise. However, domestic bondholders will be compelled to exchange their instruments for new ones.

Prior to this, the Governor of the Bank of Ghana, Dr Ernest Addison, expressed optimism that the proposed Debt Exchange Programme announced by the government will bring some confidence in the economy as well as enhance the efforts of the Central Bank in controlling inflation. He noted that the economic challenges which have affected many banks have led to the high cost of borrowing and doing business.