Gabby describes gov’t’s debt exchange programme as a ‘necessary evil’

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A sympathiser of the ruling New Patriotic Party (NPP), has described the government’s debt exchange programme as a ‘necessary evil’.

According to Mr Otchere-Darko, even though the programme will affect individual bondholders, it is a ‘critical’ move which must be implemented by the current NPP administration.

In a tweet on Sunday, he expressed his sympathies with bondholders who are going to suffer as result of the proposed programme.

He however stressed that if the debt policy is not rolled out, it will plunge the entire economy into danger, hence the need for it to be considered despite the harsh consequences.

“The debt exchange programme is voluntary for individual bondholders but a very necessary evil for our economy”, Mr Otchere-Darko wrote in his tweet.

“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!”, the NPP stalwart added.

Having touched on the relevance of the programme, he therefore called on all bondholders to rally behind government in the implementation of the policy.

According to him, if the programme fails to see the light of day, it will affect other macroeconomic variables, including the country’s ongoing bailout negotiations with the International Monetary Fund (IMF).

The remarks by the founder of the Danquah Institute come in the wake of growing public agitations from individual bondholders about the government’s proposed domestic debt exchange programme.

In a bid to rescue the economy and secure a deal with the International Monetary Fund (IMF), government has proposed that all bondholders will not receive any interest on their bonds for the 2023 financial year.

The payment of dividends, according to government is likley to begin next year, 2024 at a discounted rate of 5%.

In relation to this, bondholders who may want to transfer or even forfeit their bonds will not even be able to get the full principal they initially invested as bonds.

This proposal, since its announcement has been rejected by bondholders who have expressed frustration about the development.

In their view, if the proposal is implemented, they will suffer a great deal of loss, with many of them stating that their investments may even become unprofitable.

Some of the aggrieved bondholders, who recently interacted with JoyNews have thrown their hands in despair, with others contemplating suicide.

The affected investors say with government’s intended management of their bonds, they may not even be able to meet their expenses such as rent, feeding and the payment of fees for their wards.

They have therefore called on other relevant stakeholders to intervene in the matter.

In this regard, policy analyst, Senyo Hosi, who is part of the crusade, is currently mobilising all affected bondholders to collectively resist the move by government.

Speaking on JoyNews‘ PM Express last week, he stated that the proposal by government is ‘insensitive’ and must be outrightly resisted.

Meanwhile, government insists the debt exchange programme is the way to go in rescuing the economy.

SOURCE: myjoyonline.com