The minority in Parliament want government to halt the proposed Domestic Debt Exchange Programme (DDEP), arguing that in its current state and form it poses a real threat to the survival of financial institutions and insurance companies.
Minority Leader Haruna Iddrisu warned during a press conference in parliament that some banks and other financial institutions are yet to recover from the banking and financial sector clean-up exercise’s impact a few years ago, and that the DDEP, if allowed, could be the last straw that breaks the camel’s back. He also fears the consequences could lead to a shutdown of the broader economy.
“The Domestic Debt Exchange Programme is a risk to financial institutions and to insurance companies. Our banks and other financial institutions are still reeling after the infamous financial sector bailout. The Debt Exchange Programme will further exacerbate the already perilous financial sector.
“The future sustainability of our insurance companies cannot be guaranteed under this poorly-crafted Debt Exchange Programme. Indeed, the Debt Exchange Programme as proposed and implemented now cannot be in the interest of our financial institutions and insurance companies,” Mr. Iddrisu lamented.
Apart from this, the minority also warned that the DDEP will bring untold hardship to millions of Ghanaians whose investments are going to be affected, which will further worsen the economic plight of citizens.
The DDEP, Mr. Iddrisu stressed, represents nothing less than an attempt by government to transfer its responsibility of addressing the current unsustainable debt situation – which it has created through reckless borrowing and populist fiscal policies – to innocent Ghanaians, the investor community and the financial sector.
Consequently, the minority is demanding an immediate suspension of the controversial programme that some affected stakeholders, including individual bondholders and the Ghana Bankers Association, have so far kicked against.
“There should be deeper consultation and greater transparency regarding Ghana’s total debt and its management. The Nana Addo/Bawumia government cannot continue to manage Ghana’s economy like a private entity. Ghanaians deserve to know how much is involved and how long the debt exchange will take. It is not just about people’s investment, but much more about people’s lives and livelihoods. The Nana Addo/Bawumia government should suspend the Debt Exchange Programme now,” the Minority Leader demanded.
Government, through the Minister of Finance Ken Ofori-Atta, in the 2023 Budget Statement announced the ‘debt operation programme’ to bring the debt stock to sustainable levels. The programme among other measures, according to the finance minister, will address internal and external imbalances in the economy.
Subsequently, on 5th December 2022, the finance minister announced commencement of the debt exchange programme “to help in restoring our capacity to service debt”.
But the Minority Leader, in his address, noted that the programme has been poorly-crafted – blaming government for not properly thinking-through the idea before proposing and implementing it. This, he added, has resulted in the confusion surrounding its implementation.
“The NPP was not only reckless in borrowing but has also been reckless in announcing and implementing the Debt Exchange Programme. It is clear that the NPP government did not properly think-through this whole idea of a Debt Exchange Programme. This has led to confusion in implementation of the ongoing debt programme.”
Meanwhile, government through the Ministry of Finance has for the third time extended its deadline for voluntary participation in the DDEP which expired at 4:00pm last Monday, January 16, 2023. The new deadline is the last day of this month.
