Don’t take the ‘power’ of the people for granted – Annoh-Dompreh warns over Debt Exchange
Majority Chief Whip, Frank Annoh-Dompreh has said a good engagement on the Debt Exchange programme could have avoided the resistance it is facing from individual bondholders.
He warned the government not to take the ‘power’ of the people for granted.
He was reacting to a leading member of the governing New Patriotic Party (NPP) Gabby Otchere-Darko who was worried over the effect of low participation in the Debt Exchange programme.
Mr Otchere-Darko said attention should be focused on how the burden to individual bondholders may be possibly eased but not to take the ‘hardline’ position of simply saying no to participation.
“What we are seeing with the mobilisation of agitation on individual bondholders poses a real and serious risk worse than what we witnessed when opposition to E-Levy succeeded in derailing an already shaky macroeconomic situation from 2021,” he said.
He further indicated that the debt exchange programme is voluntary for individual bondholders but a very necessary evil for our economy.
“Its success is critical to restoring macroeconomic stability, securing an IMF prog. It hits those of us holding bonds very hard. A straight no to it is no solution!
“If the no-compromise opposition to it wins, what then has been achieved? It may lead to national debt default. So what then happens to the value of your bonds after! Potentially worthless. If participation is low, we jeopardize resolving the economic crisis and hardships.
“I’m sorry but we have to face the hard/painful truths. We ain’t sitting pretty. Our focus must be on how the burden to individual bondholders may be possibly eased; but not to take the hardline position of simply saying no to participation. It will come back to hit us harder!” he said.
The debt exchange programme announced by Mr Ofori-Atta has suffered rejection from Ghanaians.
For instance, Convener of the Individual Bondholders Forum (IBF) Senyo Hosi, said regarding the programme that in an unfortunate oppressive fashion, the government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders.
In the process, the IBF said, Ghanaians have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable.
This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission,” a statement issued by Hosi said.
The Government of Ghana (GoG) announced that under its Domestic Debt Exchange (DDE) programme, individual bondholders were to submit to a “voluntary” arrangement to exchange their domestic bonds for new benchmark bonds.
This arrangement, according to IBF, irreversibly takes away the wealth and livelihoods of direct and indirect individual bondholders whose only crime has been to trust their government.
Tied to this is a mandatory deadline which compels holders to either accept the government’s offer or risk the threat of prohibitive losses, the Forum added.
It stressed “In an unfortunate oppressive fashion, government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders.
“In the process, we have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable. This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission.”
The Individual Bondholders’ Forum (IBF) is a voluntary group of individual bondholders established with defined governance structures to coordinate and defend the interests of individual bondholders in respect of the DDE program and to engage the Government of Ghana.
source: 3news
