‘Wealthy’ individual bondholders should also bear debt burden – H. Kwasi Prempeh

The Executive Director of the Ghana Center for Democratic Development (CDD-Ghana), Professor Henry Kwasi Prempeh has said leaving individual bondholders out in the domestic debt Exchange Program makes the so-called principle of burden-sharing unacceptably regressive.

The government on Thursday bowed to pressure from Organised Labour as it exempted all Pension Funds in the Domestic Debt Exchange Programme following threats by organised labour to embark on a strike.

Addressing the media after signing a memorandum of understanding between government and organised labour, Finance Minster, Ken Ofori Atta said the exemption of pension funds from the Domestic Debt Exchange Programme comes at a very serious cost.

“Obviously the decision of exempting pension funds is at a cost and we have committed government and the organised labour to work together to ensure that we find means of plugging that hole.”

Commenting on the fallout from government’s decision on the exemption, the Executive Director of the CDD-Ghana maintained that it’s crucial to also extend the domestic debt exchange to individual bondholders, at least for amounts above a certain threshold for the purpose of plugging a portion of the hole.

“Such bondholders are, as a group, wealthier and, therefore, far less vulnerable financially than pensioners and others who have their investments in pooled or managed funds. If one of the principles here is burden-sharing, then big individual bondholders, too, should bear their fair share of the pain,” he wrote in a Facebook post.