Government’s high lifestyle of large convoys led to bad DDE deal - John Kwakye

The Director of Research at the Institute of Economic Affairs, John Kwakye, has questioned the government’s ‘lavish’ lifestyle and way of spending.

According to him, the government’s wasteful expenditure has been the leading cause of the country’s current debt position.

In a tweet on February 3, 2023, he wrote, “How come a Govt that was aware of the country's abysmal cash flow and debt distress continued to maintain a high lifestyle of large V8 convoys, luxurious private jets, expensive flagship programs, over-bloated Gov't, etc? This is what has brought us to this bad DDE deal.”

Meanwhile, an economist, Professor Lord Mensah, has stated that the posture of the government is not allowing investors to make the right decisions.

“We seem to be rushing because if you look at the numbers that were churned out, and the time that we’re using to negotiate, we did not give the investor community [enough time] to absorb the kind of information that is before them for them to think through as to whether they can adapt or adjust to a level where they can come to a compromise.

“We just seem to be pushing things down the throat of the investor community which I’m afraid of post-debt exchange what is likely to happen because we need a safe space to build the economy. So basically, that is my worry now as we speak,” he is quoted by myjoyonline.com.

His comment follows strong pushback from bondholders who have argued that the Ministry of Finance had failed to engage them appropriately on the domestic debt exchange programme and in some cases, have applied coercive tactics to get some stakeholders in the financial sector to sign onto the programme.

The Finance Ministry, in an earlier statement, established that it “has made significant progress with all stakeholders, including financial sector industry associations and representative groups of individual bondholders, with respect to their participation in the Programme.”

It also added that, “based on the agreement reached with the Ghana Association of Banks (GAB), Ghana Insurers Association (GIA), and the Ghana Securities Industry Association (GSIA), the new terms of the exchange have been accepted. A revised and final Exchange Memorandum will be released by Thursday, February 2, 2023.”

How come that a Govt that was aware of the country's abysmal cash-flow and debt distress continued to maintain a high life-style of large V8 convoys, luxurious private jets, expensive flagship programs, overbloated Gov't, etc? This is what has brought us to this bad DDE deal.

— J. K. Kwakye (@JohnKwabenaKwa1) February 3, 2023