Insensitive debt restructuring has led to expropriation of GH¢80bn by Ghanaians – Mahama

Former President John Dramani Mahama has said government's unilateral decision to embark on the debt restructuring programme has led to the expropriation of GH¢80 billion from Ghanaians.

Describing the actions taken by government as insensitive, John Dramani Mahama said the debt restructuring programme was harming businesses and individuals; especially pensioners.

Speaking at the NDC Europe Conference over the weekend, the former president said, “The unilateral, insensitive debt restructuring programme has seen over GH¢80 billion lent by millions of Ghanaians to the government by purchasing bonds expropriated."

“This has caused severe dislocation in the livelihoods of many pensioners and middle-class Ghanaian families. It has led to a depressing sight of aged pensioners picketing at the Ministry of Finance to demand their money,” he added.

He further said local businesses; including contractors and other government service providers were owed tens of billions of Ghana cedis.

The value of their monies, Mahama said, continues to depreciate.

As part of efforts for government to meet the conditions required for the IMF loan, government introduced a domestic debt exchange programme.

The programme is aimed at restoring its capacity to service its high-rising debt.

Under this programme, all domestic bondholders were charged to exchange their instruments for new ones.

Existing domestic bonds as of December 1, 2022, were exchanged for a set of four new bonds maturing in 2027, 2029, and 2037.

The annual coupons on all of these bonds were set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.

However, government failed to honour coupon and principal payments that matured on February 6 and February 20, 2023, although the Finance Minister promised to pay on February 21 after the settlement period of the DDEP.

This led some members of the Pensioners Bondholders Forum to picket the Ministry of Finance over government's failure to honour its agreement to pay bondholders after they were exempted from the Domestic Debt Exchange programme (DDEP).

Meanwhile, Ghana’s public debt stock stands at GH¢575.7billion, a report by the Bank of Ghana has shown.

This amount represents 93.5 per cent of the Gross Domestic Product.

Watch the latest edition of BizTech and Biz Headlines below:

ESA/FNOQ