An Associate Professor of Economics, Professor Festus Ebo Turkson, has averred that treasury securities – comprising bills and bonds, are still the safest pair of investments in the country despite the government’s inability to repay its debts.
Comparing government securities to other investment instruments in the market, the economics lecturer said the rate of default is low for public debts, making the T-bills and bonds the safest.
Prof. Turkson in an interview divulged that although it was unfortunate government defaulted, the state remained the safest borrower.
Consequently, the Senior Lecturer at the University of Ghana has urged the public to continue to patronize the securities as “not investing is not a wise alternative.”
“You cannot say you will not invest because definitely, there will be inflation and when there is inflation, the value of your money will fall. So, it is unwise to say you will not invest and if you are going to invest, the safest is still government bonds.”
Professor Festus Ebo Turkson
Prof. Turkson, who is a member of the Bank of Ghana’s Monetary Policy Committee, will be a panel member at the Graphic Business/Stanbic Bank Breakfast Meeting – a quarterly event which will be held on Tuesday, 21st March, 2023, on the theme: “Domestic Debt Exchange Programme (DDEP): Lessons and Implications for How you Invest.”
The event is aimed at soliciting the views of experts on how to restore confidence as well as maintain and grow the investment culture after the DDEP.
The breakfast event at the Labadi Beach Hotel in Accra will be chaired by the Managing Director of the Ghana Stock Exchange (GSE), Mrs. Abena Amoah.
The Director General of the Securities and Exchange Commission (SEC) – Rev. Daniel Ogbarmey Tetteh, will speak on the role of investments in the national development agenda and its benefit to investors while Prof. Turkson will speak on the triggers of the DDEP, lessons and strategies to prevent a repeat.
A chartered accountant and former Chief Executive Officer of the National Pensions Regulatory Authority (NPRA) – Dr. Dan Seddoh will also explore the future of investments and how to regain trust.
Lack Of Stakeholder Consultation
Speaking ahead of the event, Prof. Turkson said the manner in which the DDEP was handled led to the weakening in public confidence.
“What happened, which was quite unfortunate is that, given wide discussions or what we call stakeholder engagements, this DDEP would have gone on without any worry. But it so happened that enough consultation was not done and so it became a haggle.
“That has dented the image of government securities in terms of the extent to which you can hold them and say that the government will not default.”
Professor Festus Ebo Turkson
Commenting on the way forward as the harm as already been caused, Prof. Turkson has encouraged government to undertake massive education of the public on the need to trust government securities.
Prof. Turkson also urged primary and secondary market dealers to actively engage investors and undertake marketing for people to understand that “what we went through was necessary to get Ghana to move forward.”
The DDEP has led to the swapping of about GH¢83 billion costly and short-dated instruments for low cost, long-dated instruments.
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