Debt exchange useful but more sacrifice ahead – Ken Ofori-Atta

Finance Minister Ken Ofori-Atta says the controversial decision of the government to carry out a domestic debt exchange has “proven” to be useful in spite of the apprehension by some investors and bondholders.

The government’s policy to give a haircut to payment of interest on coupons triggered a series of protests, especially by pensioners who argue all of their life savings have been locked up.

A group calling itself the Coalition of Individual Bondholders Groups will on Thursday, June 5, 2023, join the pensioner bondholder group to picket the finance ministry as they raise fears that government may carry out a second round of domestic debt restructuring to make up for a shortfall required as part of the IMF conditionality.

However, speaking exclusively to Joy New’s Mr Ofori-Atta indicated that the earlier round of debt restructuring has yielded significant results adding that more sacrifices will be required in the days ahead.

“The domestic debt exchange program was very difficult for us as a country, but I think the need to do it is being proven so you can see some stability, and we are grateful for that,” he said on Tuesday.

When asked about what the future holds for Ghana’s economy Mr. Ofori Atta noted that “first of all, we need to acknowledge that this is just an unprecedented period in global affairs regards to the economy and all the incidents that we have seen.

“But be that as this may, I mean, July 1 last year was a very different period than July 1 this year. And the media will recognise that it’s been quite a dramatic change in where we are during that period in which we did a double take to go to the fund.”

He added, “We got the (Staff Level Agreement) SLA in record time. We got the fund approval in record time. We got three times our quota, which is an unprecedented 3 billion. We also were able to front load it so that we may get 1.2 billion this year, which is good.

“And then within three days of the approval, also, it was disbursed for us. And then inflation must taper down from 54 to where we are. I think the currency is a little bit more stable. Treasury bill rates move from 35 to maybe 20-something percent.”

Although Mr. Ofori-Atta would not outline the next phase of Ghana’s IMF bailout rollout he intimated that ”There’s a lot of work ahead, and really we need to remain faithful as Ghanaians and to push ahead. It’s going to be some sacrifice, this, but think is a direction to go”