‘Unilateral’ debt exchange will destroy Ghana’s credibility – Togbe Afede

The Agbogbomefia of the Asogli State, Togbe Afede XIV, says the unilateral debt exchange programme announced by the government is the wrong response to the current economic mess.

The Investment Banker in a 14-page opinion piece said the debt exchange programme will destroy Ghana’s credibility and undermine the progress “we have made in the development of our capital market”.

“In the short term, we must get our response to the current debt crisis right. The unilateral domestic debt exchange announced is a wrong response that will destroy our credibility as a country, undermine the progress we have made in the development of our capital market, especially the debt market, and set us back several years,” Parts of Togbe Afede’s opinion piece read.

The former President of the National House of Chiefs also added that a combination of bad monetary policies, a lack of proper planning, cronyism and tribalism are the causes of the country’s economic malaise.

He said looking at the various natural resources available to Ghana, the country should not be going through the current economic crisis.

“Understanding our difficulties is the first step in the search for solutions. Our chaotic economic situation is the product of a toxic mix of, among others, our dishonesty; partisanship, cronyism and tribalism; greed-fuelled corruption; lack of proper planning, and the consequent episodic approach to economic management; and bad monetary policy that has indexed our future to the past. The situation is worsened by our attitudes and beliefs, and by a constitution that has outlived its usefulness.”

The Board Chairman of Hearts of Oak also described the government’s claim of no haircut in the debt exchange programme as a mockery. He said a reduction in promised coupons amounted to haircuts.

“We are now faced with questions about debt sustainability and our ability to find the fiscal space to fund urgent and critical development needs. Now, the fears about Ghana defaulting on its debt repayment have effectively materialised with the announcement of a domestic Debt Exchange Programme. And we are making a mockery of ourselves talking “no haircuts” when that is exactly the effect of a reduction in promised coupon payments.

Togbe Afede also admonished the government to increase taxes on high-income earners, companies, and properties as part of revenue-generating measures.

He also asked the government to introduce taxes on income from tax-exempt government domestic bills and bond investments. Immediate re-introduction of road tolls at much higher rates than they were in the past.