‘It’s like you don’t care about how people feel’ - Randy Abbey slams Akufo-Addo over ‘haircuts’ comment at SONA

Popular Ghanaian broadcaster and political pundit Dr. Randy Abbey has slammed the government for its debt exchange programme and the alleged ‘haircuts’ on some bonds.

Speaking on the Good Morning Ghana show on Metro TV on Thursday, February 29, 2024, Dr. Abbey said the government was being unfair and dishonest to the investors who bought bonds backed by the Energy Sector Levy Act (ESLA) and the Ghana Education Trust Fund (GETFund).

He said these bonds were supposed to be safe and guaranteed by the tax revenues from these levies, which have not been withdrawn, reduced, or scrapped.

According to him, the government was reneging on its promise to pay the full value of the bonds and was imposing ‘haircuts’ or reductions on the principal and interest payments.

“You come to me and you tell me ‘look, I have a levy called ESLA. It brings in X amount of money every time. And so I want to use this to raise funds. I am selling ESLA bonds. Come and buy. Or there is a tax handle called the GETFUND levy, this is how much it rakes every month. I am creating a bond for you to come and buy. This is a tax handle, statutory funds are going in. Your money is safe and based on that, I invest.

“These tax handles have not been withdrawn. They have not been reduced. They have not been scrapped. And then you tell me that you won’t pay me what I’m entitled to. And then, after all that, you tell me you will reduce it?” he quizzed.

Randy Abbey said this was a breach of trust and a sign of disrespect to the investors and the public.

He said the government did not care about how people would feel or react to its actions.

“It’s like you’ve checked out. You don’t even care how people will feel. Because when you feel how they will feel, you will not act like that,” he said.

He said the government should honour its obligations and stop playing games with the economy.

Background

In 2022, Ghana faced a severe debt crisis that threatened its fiscal sustainability and access to international markets.

The government announced a domestic debt exchange programme that invited holders of eligible bonds and notes, including ESLA bonds, to voluntarily swap them for new bonds with longer maturities and lower coupon rates.

This was intended to reduce the present value of public debt and ease the pressure on debt servicing.

The government assured bondholders that there would be no haircut on the principal of the bonds, but only on the interest payments.

However, some bondholders, especially foreign investors, were reluctant to participate in the debt exchange, fearing that it would erode the value of their investments and expose them to currency risks.

The debt exchange programme was one of the conditions for Ghana to receive a $3 billion bailout from the International Monetary Fund (IMF), which also required the government to implement fiscal consolidation measures and structural reforms.

The IMF hoped that the debt exchange would help restore Ghana’s debt sustainability and market confidence, and support its economic recovery from the COVID-19 pandemic.

However, some analysts and civil society groups criticized the debt exchange as a form of default that would damage Ghana’s reputation and credit rating and called for more transparency and accountability in the management of public debt.

ID/EK

Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.