DDEP: Government's fiscal indiscipline causing bondholders resistance

An economist with GCB Capital, Courage Boti, says the lack of government’s commitment to fiscal discipline is not encouraging investors to commit to the Domestic Debt Exchange Programme (DDEP).

This comes on the back of demands by a section of the public for the government to go back to the negotiation table again with the International Monetary Fund (IMF).

But commenting on the suggestion on Starr Today with Joshua Kojo Mensah, Mr. Boti said the government’s huge debt calls for huge adjustments not only on debt restructuring but fiscal spending as well.

He described as unfortunate the focus on debt restructuring with a low concentration on the fiscal side by government in achieving the needed result.

“Yes or no the IMF will bring the consolidation that is required. But on the part of the government, the 2023 budget is not what is required to bring down the spending. I understand we have socio-economic needs and infrastructure needs and all of that but there should be other things before we can spend on those things.

“The wages and salaries we need to actually look at ways to bring it down. Some projects that are not tied to debt can wait. Those are the commitments that need to come from the government to assure the bond investors that the government is willing to support the system,” the economist explained.

He continued: “Unfortunately, those assurances are not coming in the way we expect them and that’s why the market is on the edge. So the call for renegotiation I don’t think it’s out of place and I am also not sure that we are there yet.”

However, a former Chief Justice, Sophia Akuffo who joined Pensioner Bondholders to picket at the Ministry of Finance wants the Finance Minister, Ken Ofori-Atta to go back to the drawing board and rework the terms of the Debt Exchange Program

Sophia Akuffo livid over the inclusion of Pensioners’ investments in the Domestic Debt Exchange programme said: “I’m encouraging people not to sign up to anything, Yes, and if need be we can all go to court”

Pensioner bondholders on Friday pitched camp at the Finance Ministry to picket over the controversial Domestic Debt Exchange Program.

The group of about 50 retirees says they will not accept any haircuts on their investments despite government’s proposal of a 15% coupon rate.