The government’s proposed debt swap scheme, according to a former chairman of the finance committee of parliament, is too flimsy.
According to Dr. Mark Assibey-Yeboah, the program is not in-depth enough in light of the condition the nation is in.
The former MP from New Juaben South applauds the administration for the action, nevertheless.
It is the first step toward addressing the present economic problem, in his opinion.
In an interview with Citi FM on Tuesday, Mr. Assibey-Yeboah said, ““I will even say that the exercise has not been deep enough because from what we are hearing, individual bondholders are excluded, and there are no haircuts on the principal as it were and there have been some concessions if you like, so I think this is the softer way to go.”
The capacity of the administration to reach an agreement with the International Monetary Fund was also mentioned by Dr. Assibey-Yeboah (IMF).
He claims that the nation’s debt is no longer manageable.
“The IMF Programme is dependent on this debt restructuring, so before we can sign up for the programme, we need to restructure our debt. Our debt has become unsustainable, in simple terms, we simply cannot repay our debts, and we have to do something about it.
“The Government has admitted that the only way out of the economic mess is for us to sign up for an IMF programme and this has become a prerequisite for signing up for the programme and so if we don’t restructure our debt, we cannot have the programme in place.”
On Sunday, December 4, Finance Minister Ken Ofori-Atta unveiled the government’s domestic debt swap scheme.
These procedures contain a few exclusions and guidelines for the restructuring of foreign debt.
Treasury bills and individual bondholders won’t be impacted by this exercise, according to his release.
Domestic bondholders, however, will be required to exchange their current securities for new ones.
“Existing domestic bonds as of December 1, 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.
“The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% in 2025 until maturity.
“Coupon payments will be semi-annual,” the Minister said.