Debt Exchange: Taking people’s money by force will plunge us into more crisis – Gyampo

A Political Science lecturer at the University of Ghana, Professor Ransford Gyampo, has disagreed with the government on its domestic debt exchange programme.

According to him, the entire country is in crisis but the country will be plunged into more crisis if the government goes by its proposed programme.

In a Facebook post on Thursday, 8 December 2022, Professor Gyampo said: “A bond is a contractual agreement between a borrower and a lender.

“Changes to the terms can only be done with the prior consent of all parties.”

He added: “We are in crisis, but taking people’s money by force, plunders us into more crisis.”

As part of efforts to decrease the country’s debt burden, the government announced the debt exchange programme in the 2023 budget.

Outlining the modalities for the programme, Finance Minister Ken Ofori-Atta said: “Under the domestic bonds exchange programme, domestic bondholders will be asked to exchange their instruments for new ones.

“Existing domestic bonds as of 1st December 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.”

The Minister explained that: “The annual coupon on all these bonds will be set at zero per cent in 2023, 5 per cent in 2024 and 10 per cent from 2025 until maturity… In line with this, treasury bills are completely exempted, and all holders will be paid the full value of their investments on maturity.

“There will be no haircuts on the principal of bonds, and individual holders of bonds will also not be affected.”