Isaac Adongo, the deputy ranking member of the finance committee in Parliament of Ghana, has criticized the government for using $3 billion of the IMF’s rescue funds instead of $10 billion from bondholders.
As part of crucial steps to obtain board-level approval with the International Monetary Fund (IMF) on a $3 billion facility to restore macroeconomic stability in the nation, the finance minister had earlier stated in a press release that the government had secured more than the required 80% participation in the (DDEP).
In order to reduce its overall debt, which now stands at roughly 575.5 billion Ghana cedis, to levels that can be sustained, the government set a target participation rate of 80% in the program to help restructure 137.3 billion Ghana cedis in bonds on the domestic market.
Which was a requirement the nation had to fulfill in order to potentially receive a 3 billion bailout.
The government thanked the Ghanaian people for their support during these extremely trying times and promised to take into account the suggestions provided by all participants throughout the DDEP engagements to further reduce government spending.
The finance ministry insisted that because the exercise was voluntary, the individual’s entitlement to self-exemption was never in question.
The deputy ranking member remarked during an interview with Francis Abban on Morning Starr monitored by Ghanatodayonline.com “The government is saying, forgo your money so that we can achieve compliance with the internal arrangement of the IMF. So, we can get a program that gives us $3 billion. And yet the people’s money that you want to use to sacrifice is over $10billion. So, you want to destroy $10billion in order to go and collect $ 3 billion dollars over three years not even one year” he quizzes.
“These are people’s monies, these are not the government of Ghana money, these are pensioners’ money. And these are monies they gave to you on the trust of the sovereign. Now the government says we want to take your money, we won’t give you the money because the economy is in trouble”.
”So the government says in the budget I have 52 billion of interest payment. 31billion of that is attributable to Ghanaians that I need to pay them in 2023. I am not going to pay you that money I will pay you zero. I have extended 21billion that I have to pay to external creditors. I write a letter to them suspending payment I’m not going to pay. The same external creditors, I owe then 22billion that I have to pay this year, I am not going to pay. So, in all, to achieve debt sustainability and be able to qualify for the IMF program, in 2023 alone 74billion of debt service I am not paying. How can you do this and celebrate as success” Mr Adongo added.
With the debt operation, which includes local and foreign creditors, Ghana wants to lower its debt to 55% of its GDP by 2028.
Engagements with external creditors on a potential debt restructure come after the DDEP is finished.
After obtaining a participation rate of roughly 85%, the government decided to postpone the settlement deadline for bonds under the domestic debt exchange scheme by another week.
The previous deadline for settlement, which was February 14, has now been moved up to February 21 of 2023.
The government claims that the action is being taken to give it enough time to properly conduct the settlement of the new bonds.
“To provide sufficient time to settle the New Bonds in an efficient manner, the Government is extending the Settlement Date of the Exchange from the previously announced 14th February 2023 to 21st February 2023”, the Ministry of Finance said in a statement.
The real settlement date will be reflected in the new bonds’ issuance date, interest accrual schedules, and payment schedules.
After the exchange time has ended, no more tenders will be accepted, and neither revocations nor withdrawals are allowed.
The government revealed the outcomes of the Domestic Debt Exchange Programme (DDEP), which ended on February 10, 2023, in the announcement.
The Ministry of Finance disclosed that, out of a possible GH 97,749,624,691 under the scheme, it had successfully traded old bonds totaling GH 82,994,510,128.