- Dr Mark Assibey-Yeboah fears there will be an economic meltdown if the Domestic Debt Exchange Programme is implemented in its current form
- The NPP politician has said banks may collapse unless the finance minister makes some concessions in efforts to deal with its huge debt problem
- The former Juaben South MP wants the government to proceed cautiously if it doesn't want the economy to crash
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A known politician affiliated to the governing New Patriotic Party (NPP) has painted a gloomy picture about the likely outcome of the Domestic Debt Exchange Programme (DDEP) if it is made to stand.
Dr Mark Assibey-Yeboah, a former New Patriotic Party (NPP) MP for New Juaben South, fears many commercial banks may soon be thrown out of business if the programme to deal with the country's debt challenge is implemented.
"Let’s say...a bank is exposed to government bonds to the tune of GH¢2billion even at 20%, that is GH¢400million in interest payments for holdings. Do you know what that will mean to your balance sheet?" he quizzed during an interview with TV3.
Assibey-Yeboah becomes one of the very few members of the governing party to openly criticise the strategy being proposed by finance minister, Ken Ofori-Atta.
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Controversial Debt Exchange Programme
The DDEP is part of a wider debt restructuring strategy by the debt-distressed Nana Akufo-Addo-led administration. It is one of the conditions for the success of a $3 billion loan application Ghana has sent to the International Monetary Fund (IMF).
Ghana owes both local and foreign creditors in excess of GH₵400 billion ($37 million) and the DDEP is the plan to stagger payments to domestic creditors -- banks, individual bondholders, pension fund managers etc -- in a way that will not put too much pressure on the government.
Among other things, government is proposing to pay investors only 5% of their maturities starting from 2024, a proposal condemned widely as untenable and insensitive.
Speaking to TV3, Mr Assibey-Yeboah, who once chaired Parliament's Finance Committee, said government is better off rationalising its expenditure.
“Very soon banks are going to lay people off. We haven’t even gotten to the external. Now, all projects for which we contracted loans, the IPCs are not doing anything so very soon you will see the Obestebi Interchange and all those construction works grinding to a halt because the external creditors are saying if you are going to suspend debt repayment then we are not going to advance any further loan,” he said.
Christian Council demands immediate suspension of DDEP
Meanwhile, YEN.com.gh has reported in a separate story that the Christian Council of Ghana is demanding the immediate suspension of the Domestic Debt Exchange programme.
The council has said the programme needs to be halted till broader stakeholder engagements.
The demands come on the back of widespread agitations by individual bondholders after they were included in the programme.
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