Economist and Political Risk Analyst, Dr. Theo Acheampong is urging government to review its target of reaching a 55% Debt-to-GDP ratio by 2028.
He views the target as too ambitious adding that it imposes undue pressure on government, forcing it to further burden some categories of bondholders.
Dr. Acheampong believes that if the 55% Debt-to-GDP target is further pushed to 2032, there will be enough room for negotiations.
Speaking on Citi FM/TV‘s news analysis programme, The Big Issue, Dr. Achempong said “if we want to exclude the individual bondholders from the whole exercise as well as the pension fund and others, we need to relook the 55% Debt-to-GDP ratio target for 2028. We need to go back to the drawing board even in terms of the whole fiscal arrangements and renegotiate with the IMF”.
“The 55% target can be pushed further to say 2032, this will allow for more negotiations. The terms of the programme are too onerous, it imposes an undue burden on different categories of bondholders, and will have a ripple effect of further slowing down the economy.”
In the government’s quest to address the country’s economic woes, the government launched the debt exchange programme to invite holders of bonds to voluntarily exchange approximately GH¢137 billion domestic notes and bonds of the Republic including ESLA and Daakye for a package of new bonds.
It is currently unclear how many institutions and individuals have signed onto the programme.
The domestic debt exchange program since its announcement has faced huge opposition from labour groups that managed to get pension funds exempted. Several groups made up of individual bondholders have also rejected the programme by the government.
The individuals have threatened to sue the government if not excluded insisting the programme will negatively impact them.
Meanwhile, the deadline for signing up has been further postponed to Tuesday, January 31, 2023.