Ghana’s current approach is fairly abnormal – Bright Simons

Honorary Vice President of IMANI Africa Bright Simons has criticised government’s approach to the debt exchange programme.

Expressing his displeasure about the programme on JoyNews’ Newsfile on Saturday, he said the “current approach is fairly abnormal.”

According to him, the approach is based on a headlong rush, which he said is a problem.

“It is not really common for countries to seek to restructure the debt at the speed at which Ghana is going.

“So if you recall the first time the financial industry and investors were told upfront that Ghana is definitely going to default was on December 2, and at that time the government expected to get a deal in two weeks because it launched the actual process on December 5, and said the deadline is December 19, this was unprecedented,” he added.

Mr Simons cited a case in Barbados with has done both domestic and external debt restructure while lauding the approach Barbados deployed.

“Barbados took 18 months in building the consensus that was necessary before officially launching the debt exchange and often when you do that, it takes a couple of months and you are through if you already have the consensus,” he said.

“Look at Grenada also similar to our situation about 30 months, Jamaica around 30 months and the average in the Caribbean which has seen the most debt restructuring per capita is about 13 and half months so these one week, two weeks..you have to do this quickly has never happened anywhere in the world, he added.

He, therefore stated that the government’s now engagement with stakeholders on the programme should have been done long ago.

In order to stabilise the economy and reach an agreement with the International Monetary Fund (IMF), the government has proposed that no bondholders receive interest for the fiscal year 2023 in a debt exchange programme.

Meanwhile, the debt exchange has been mostly rejected by various bondholders demanding to be exempted from the programme.

Mr Simon added that the “only reason this is happening [rejection] is that government persistently failed to face out to the fact that Ghana’s debt was unsustainable.”

Further situating Ghana’s context to others around the world, he noted that although countries have gone through a similar restructuring, government “should not try and suggest a supreme debt default.”