A Vice President of Imani Africa Bright Simons has said that the upper middle class in Ghana will now opt for more investment opportunities abroad due to the domestic debt exchange programme that has been introduced in Ghana by the Finance Minister Ken Ofori-Atta.
In a tweet, he said “Folks all fired up about how the economic situation will now push upper middle class folks to join the political fray for more accountability.
“Sorry to burst your bubble, but it will just push them to look for more investment options abroad, causing more economic [problems]for Ghana.”
Folks all fired up about how the economic situation will now push upper middle class folks to join the political fray for more accountability. Sorry to burst your bubble, but it will just push them to look for more investment options abroad, causing more econ wahala for Ghana.
— Bright Simons (@BBSimons) January 15, 2023
Regarding he debt exchange, the Majority Leader in Parliament, Osei Kyei-Mensah-Bonsu indicated that the Programme could wipe out the middle class.
This, he said, is where the danger is hence, further engagements are needed.
He said these while speaking with a group of individual bondholders led by convener, Senyo Hosi and private legal practitioner Martin Kpebu when they submitted a petition to exclude individual bondholders from the debt exchange to him on Friday.
The Suame Lawmaker said “What we [are] talking about is that many of these bondholders also belong to the middle class and that’s where the major worry is. If we are wiping away the middle class, that could be dangerous, so we need to have some further dialogue on this.
“Government thinks that this is the best way forward, however, even if it is, we need to engage, reflect and then move on and that will encourage some people who have some doubt to better appreciate where we are.”
“Nothing can substitute for discussions, round table discussions and engagements wherever we find ourselves in. I think it’s important that we go back to the drawing table to have engagements with the major stakeholders…All of us are in it. And if we don’t manage it well, we’ve gone through this before, way back some 25, 30 years ago and repositioning was a major, major difficulty.
“Today many people are coming on board and if this thing should happen, how do we build confidence and trust and reconstruct a new savings culture?”
Also, the New Patriotic Party (NPP) Member of parliament for Nsawam Adoagyiri, Frank Annoh-Dompreh asked the Finance Minister Ken Ofori-Atta to review the decision to include individual bondholders in the programme.
He described the inclusion of the individual bondholders as unfair and untenable.
“The Finance Minister (Ministry) must as a matter of urgency review as soon as possible its decision and resolution on individual bond holders. I don’t agree with them and I think it’s unfair and untenable! Review your decision now,” the Majority Chief Whip tweeted.
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 GoG.
Source: 3News.com