External Debt Restructuring: Extensively engage external creditors – Prof Bokpin advises Gov’t
Senior Lecturer at the University of Ghana Business School (UGBS), Professor Godfred Bokpin, has advised government to extensively engage external creditors on its external debt restructuring programme.
According to Prof. Bokpin, failure by government to extensively engage external creditors, will result in “complications” for the country.
Adding that, unlike domestic creditors (whose opposition to the DDEP is weak), external creditors will strongly oppose any external debt restructuring programme that has not been extensively discussed with them.
The assertion by Prof. Bokpin follows agitations by labour unions in the country over the government’s Domestic Debt Exchange Programme which will see their pension funds significantly affected.
The agitations and opposition by labour unions is due to little or no consultations on the debt exchange programme with labour unions by government.
Meanwhile, Ghana has commenced external debt restructuring discussions with its external creditors, Finance Chief Ken Ofori-Atta has said.
Making the disclosure during a joint press briefing by the Finance Ministry and the IMF, Mr Ofori-Atta averred discussions with external creditors on a proposed external debt restructuring programme will intensify this week.
According to the Finance Chief, the external debt restructuring programme will affect both bilateral and individual creditors.
“We have already started external debt restructuring discussions with external creditors, but we will kick off strongly this week,” said Mr Ofori-Atta.
Touching on the parameters to be used in the creation and implementation of the external debt restructuring programme, IMF Mission Chief to Ghana, Stéphane Roudet, noted that, “Parameters to be used in external debt restructuring programme is solely a sovereign decision, it is for the government to decide on that.”
An external debt restructuring programme is likely to cause an uproar among external creditors same as it did among domestic creditors when the DDEP was announced by government on December 5, 2023.
An unfavorable debt restructuring programme for external creditors, is likely to severely impact Ghana’s chances of raising long term capital from the international debt market.
Currently, Ghana’s debt to external creditors is in the range of $28bn.
