Bokpin warns of potential repeat of debt restructuring programme
University of Ghana Business School Professor Godfred Bokpin is raising concerns about the potential for a repeat of debt restructuring if the government forces individual bondholders and pensioners to participate in the Domestic Debt Exchange Program.
In a recent interview, Bokpin warned that this could create a governance system where governments mismanage the economy and later resort to debt restructuring.
Bokpin emphasized that for any gains made through the IMF program to be sustainable, governance reforms must be the foundation of any structural adjustment.
He also stated that individual bondholders should not sign onto the program until the fiscal side has done what it is supposed to do.
The professor expressed concerns that this could create an incentive for political elites to borrow and misuse funds, knowing they can apply haircuts on bondholders later.
He concluded by saying, “We should not allow that to happen.”
The Domestic Debt Exchange Program is set to end on February 7, 2023. Despite this, the government has appealed to individual bondholders who have yet to sign onto the program to do so.
