Professor Lord Mensah, a Financial Consultant and Associate Professor at the University of Ghana, has expressed that the government seems to be rushing with its domestic debt exchange programme (DDEP).
Government of Ghana, according to him, neither took any patience in analyzing the whole positive and negative impact associated with the implementation of the debt exchange program, nor sought for advice from great financial intellectuals and economists before taking the needed step to accept the concept of the program. “Not even the very stakeholders of the investor community,” he said.
“Due to the novelty of the debt treatment in Ghana’s fiscal space, it would have only been prudent for government to have used ample time to engage the investor community on the exercise, while affording them enough time to think through their decisions.”
Professor Lord Mensah
His comment follows the strong pushback from bondholders who have argued that the Ministry of Finance had failed to engage them appropriately on the domestic debt exchange programme and in some cases, have applied coercive tactics to get some stakeholders in the financial sector to sign onto the programme.
Prof. Lord Mensah, speaking during an interview divulged that ample time for engagement would have afforded the investor community the chance to fully participate in the programme while ensuring that their views were being included in the policy formulation.
Not limited that, he further disclosed that engagement with stakeholders would have given members of the investor community the opportunity to think of measures that can be adopted to cushion individuals investing.
“We seem to be rushing because if you look at the numbers that were churned out, and the time that we’re using to negotiate, we did not give the investor community [enough time] to absorb the kind of information that is before them for them to think through as to whether they can adapt or adjust to a level where they can come to a compromise.
“We just seem to be pushing things down the throat of the investor community which I’m afraid of post-debt exchange what is likely to happen, because we need a safe space to build the economy. So basically, that is my worry now as we speak.”
Professor Lord Mensah
Government’s Rush Has Led To Continuous Extension
Amidst lots of disagreement and no vivid consensus with stakeholders of various sectors and associations like the Individual Bondholder’s Forum, Professor Lord Mensah averred that government has extended the deadline for the Domestic Debt Exchange Programme (DDEP) numerous times
The last, he said, was extended from the just ended 31st January, 2023 to to February 7, 2023.
According to him, if there had been some ample time in planning and engaging with stakeholders, the problem would have been handled without much time wasted.
The Finance Ministry in a press release on Tuesday added that a new settlement date of Tuesday, February 7, 2023, will be confirmed via the new Exchange Memorandum.
The original deadline for the Programme expired at 4 pm, January 31.
In line with lots of disagreement following the announcement of DDEP, the Ministry said it has made significant progress with all stakeholders, including financial sector industry associations and representative groups of individual bondholders, with respect to their participation in the Programme.
The Finance Ministry announced updates based on its meeting with stakeholders and announces that based on the agreement reached with the Ghana Association of Banks (GAB), Ghana Insurers Association (GIA), and the Ghana Securities Industry Association (GSIA), the new terms of the exchange have been accepted. “A revised and final Exchange Memorandum will be released by Thursday, February 2, 2023,” it said.
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