Member of Parliament for Yapei/Kusawgu, John Jinapor, has attributed the government’s Domestic Debt Exchange Programme (DDEP) to the infamous Menzgold.

According to him, the entire programme spearheaded by the finance minister, Ken Ofori-Atta, is not only obnoxious but one that does not bode well for holders of government bonds or, more broadly, financial sector confidence.

Due to the economic downturn and difficulties in servicing its debt, the government implemented the domestic debt exchange programme to give itself more time to meet its fiscal obligations. Without the debt exchange programme, the government warned that the nation’s economy would collapse severely.

Speaking after Finance Minister, Ken Ofori-Atta briefed Members of Parliament on Thursday, February 16, 2023, on the debt swap process, Mr Jinapor expressed his reservations about the programme.

“If you digest all these, the most important thing the finance minister has told the people of Ghana is very simple. If you evaluate what he is doing, and evaluate what NAM 1 of Menzgold did, the two are synonymous and the same. There is no difference.”
John Jinapor

The Yapei/Kusawgu legislator equally advised Leonard Chumo, who has been appointed by the International Monetary Fund (IMF) as a financial adviser to the Bank of Ghana, to exercise extreme caution. He stated that Mr. Chumo must thoroughly review all documents provided to him by the Central Bank.

IMF financial advisor cautioned to be wary of Bank of Ghana

Mr Jinapor claimed that he had lost all trust in the Governor of the Bank of Ghana and that as a result, he was advising the supervisory advisor to carefully monitor the BoG’s operations.

“Mr Chumo, please let me thank you and welcome you to Ghana. But let me plead with you, please open your eyes at the Bank of Ghana. I cannot trust that Governor one bit. I beg you open your eyes, scrutinize the documents and ensure that the right thing is done.”
John Jinapor

The advisor has been appointed by the IMF to provide technical support to the Bank of Ghana and aid in strengthening the capability of its banking supervision functions. He began his assignment on February 6, 2023.

Meanwhile, finance minister, Ken Ofori-Atta has revealed that provisional 2022 fiscal data show that debt service comprising domestic interest payments, external interest payments, external debt amortization, and payment of domestic maturities not rolled-over all amounted to Gh¢81.6 billion. This, he noted, constitutes 85.1 percent of all revenues in 2022 and implies that significant proportion of our revenues were used to service debt in 2022.

Among other things, he noted that at this level, Ghana was assessed to be at a “high risk of debt distress” and its debt classified as unsustainable. Clarifying his point, he indicated that the current state of the country’s debt is because of the lingering effects of the COVID-19 pandemic, the Russia–Ukraine war.

“This has been exacerbated by the high macroeconomic instability experienced in 2022, occasioned by downgrades by rating agencies as well as the consequential pressures on Government finances due to the actions of non-resident investors and the delayed passage of our revenue bills.”
Ken Ofori-Atta

The finance minister stated that this situation is further compounded by the comparatively low levels of domestic revenue collected by Government. In 2022, he noted that tax to GDP was just about 12.6%; woefully below the SSA average of 18% and insufficient enough to meet pressures on the public purse.

“Following these developments, H.E the President during his address to the nation on the economy on 31st October 2022 had to declare that the economy is in crisis. Government therefore outlined key strategies in the 2023 Budget presented to this House, on Thursday, 24th November 2022 to address the economic challenges.”
Ken Ofori-Atta