Debt Restructuring: IMF teaching government lessons on reckless borrowing – Gatsi

The Dean of Cape Coast University Business School, Professor John Gatsi says the debt restructuring conditionality slapped on Ghana is a lesson from the International Monetary Fund (IMF).

The government has announced modalities of a domestic debt exchange following the conclusion of Debt Sustainability Analysis as part of negotiations with the International Monetary Fund (IMF).

In line with the programme, domestic bondholders are billed to exchange their instruments for new ones, Finance Minister Ken Ofori-Atta said in a televised announcement on Sunday.

According to him, existing domestic bonds as of 1st December 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032, 2037.

Commenting on the development on Starr Today with Joshua Kojo Mensah, Mr. Gatsi indicated that the gloomy picture the conditions are showing is not the fault of the IMF.

According to him, Ghana must fulfill the conditionality before deeper discussions will take place for the bailout.

“So I believe that the government is on the move to ensure that they comply with the pre-condition given by the IMF. We have not displayed the amount of money we borrowed. The IMF was aware of our engagement with the HIPC initiative and most African countries have not shown from the benefit they got from the HIPC initiative. There are no cogent reasons for external debt holders to be providing debt forgiveness etc.

“So I believe from that perspective they are trying to teach us a great lesson and by now all of us will be angry. When the government has overborrowed and not using the funds very well, we will all be alive to answer,” the Dean of the Cape Coast University Business School stated.   

However, an economist, Mensah Tukornu has said the government has lied to Ghanaians about the E.S.L.A and Daakye bonds it acquired.  

“We don’t have an honest government. This is very sad. People are going to die as a result of this announcement. I am telling you the facts. Because this is the same way this same government spent about 25 billion Ghana cedis to wipe away or to rationalize between seven to nine billion they have alleged to have caused by banks,” Mr. Tukornu stated.