DDEP: Prof. Bokpin calls for suspension of ex-gratia until 2040
Professor Godfred Bokpin, is urging the government to undertake bold fiscal reforms including the suspension of ex-gratia until 2040 as well as reduction in its appointees if it the debt exchange programme is to be successful.
According to him, government cannot solve the financial crisis by disproportionately loading it on creditors.
Speaking in an interview on Joy FM on Tuesday, Professor Bokpin said the financial sector is under threat from low confidence and the lack of savings if government does not handle the debt exchange programme well.
“What makes it a bit worrying for me is the fact that there is a perceived unfairness in the level of adjustment between fiscal level adjustments – expenditure-based fiscal adjustment – and then restructuring on the part of creditors. Of course, when it comes to creditors’ type, you also want to look at equity fairness within that type. If you look at what has brought us here and the way we’re [government] trying to resolve it, it’s not logical”.
“Unfortunately, you will see from the approach of government that they are unwilling to do their part of the burden sharing and once the fiscal side is only doing less, then it means that the burden will disproportionately be shifted to creditors. That’s why everything appears like the creditors must take a deeper haircut whilst the politicians who created the mess are getting away with the murder”, Professor Bokpin added.
He called for the resignation of President Akufo-Addo if he cannot govern with less than fourty ministers and undertake other fiscal reforms.
“I think, we must come together as a country and shape governance, ask for the necessary reforms. We must as a matter of urgency ask for a reduction in the size of ministers, merge some ministries. If our President [Akufo-Addo] cannot govern with less than fourty ministers, and undertake the other reforms, he should resign and give Ghana a chance”.
He expressed unhappiness about the inactivity of some state-owned enterprises that are only adding more debt on the country.
Meanwhile, Government has announced the extension of the deadline date for the submission of existing bonds in exchange for new bonds under the Domestic Debt Exchange Programme (DDEP).
Government, through the Finance Ministry has extended the new deadline date to January 16, 2023 from the previous deadline date of December 30, 2022, with the new settlement date being January 24, 2023.
In addition to extending the deadline, Government has made some amendments to the Domestic Debt Exchange Programme (DDEP) to include eight (8) new debt instruments (bonds) moving the total bonds under the DDEP to 12 bonds with each bond maturing each year from January 2027 to January 2038.
According to the Finance Ministry, its decision to amend terms of the DDEP and extend the deadline date was due to the “consideration of feedback from the financial sector in relation to the need to secure internal approvals.”
“Further, this extension affords the Government of Ghana the opportunity to consider suggestions made by all stakeholders with the aim of adjusting certain measures acceptable within the constraints of the Government’s Debt Sustainability Analysis,” it added.
