THE OPPOSITION National Democratic Congress (NDC) Members of Parliament (MPs) have rejected the government-led effort to restructure the country’s debts, threatening to block the deal in Parliament.
Finance Minister, Ken Ofori-Atta, announced that the government intended to replace existing domestic debt with four new bonds, which would mature in 2027, 2029, 2032 and 2037, as part of the requirements for the country to qualify for a US$3 billion programme with the International Monetary Fund (IMF).
The IMF wants Ghana to get its debt on a sustainable path to qualify for support, and the minister indicated during the announcement that local bondholders would lose only interest payments, intimating, “There will be no haircut on the principals of bonds,” and added, “External-debt restructuring parameters will be presented in due course.”
But the Minority MPs have opposed the move, pointing out that the form and structure of this debt restructuring is unacceptable to them.
Leader of the caucus, Haruna Iddrisu, said at a press briefing in Parliament yesterday, “We simply cannot agree to this as it has dire consequences on the financial sector, on pension funds and on jobs. We are all at risk.”
He noted that President Akufo-Addo had earlier indicated that “there will be no haircut” and wondered who should Ghanaians believe.
He argued that Ghana is the first country in Africa to announce domestic debt restructuring, and asserted that the nation had officially defaulted in the repayment of the terms of “our existing domestic debt.”
“Ghana joins Greece and Jamaica in the last 10 years,” Mr. Iddrisu intimated, and said the NDC Minority had been consistent on this matter.
“We cautioned and warned the government about engaging in reckless borrowing and spending! How come the contours of this exchange programme were not announced in Parliament during the 2023 budget presented on November 24, 2022. Will it require legislation? How come that a major policy step of this dimension was not part of his presentation to Parliament?” he quizzed.
Expenditure Cuts
The Minority Leader said they expected major expenditure cuts to achieve fiscal consolidation, adding, “The size of Government must be reduced drastically. We demand responsible spending.”
According to him, the NDC MPs will not accept the GH¢1.4 billion allocation as a contingency vote, which was captured in the 2023 Budget, describing it as “outrageous.”
“We note that this allocation is an additional GH¢400 million compared with last year’s allocation of GH¢993 million. This cannot be happening in a period of austerity,” he noted.
The NDC MP for Tamale South said his side was also opposed to an allocation of GH¢10 million to the Defense Advisory Services.
“We also strongly denounce plans to increase the staff strength at the Office of Government Machinery by a staggering 1,570 at page 230 of the 2023 Budget. This will increase total staff strength at the OGM to 3,681. This is unconscionable at a time Government has announced a total freeze in public sector jobs,” Haruna stated.
BY Ernest Kofi Adu, Parliament House