The Member of Parliament for Dormaa East, Paul Apraku Twum Barimah has called on Ghanaians to disregard the propaganda and misinformation being churned out by the Minority in Parliament on the Debt Exchange programe.
Speaking in an interview , Honourable Apraku Twum Barimah said, contrary to the speculations and misinformation by the National Democratic Congress and its representatives in parliament, the Domestic Debt Exchange programme is a potentially positive development for the financial market in Ghana.
He said through the swapping of high-interest domestic bonds with lower-interest ones, the programme will save government millions of dollars in interest payments, which could be used to help boost the economy and address other challenges such as inflation and the depreciating cedi.
According to honourable Twum Barimah, the Debt Exchange Program has the potential to improve the country’s fiscal health and reduce the debt burden on the country
The proposed interest rate being offered in this domestic debt exchange programme is 10% per year, with a stepped-up schedule starting at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
“It is worth noting that the exchange programme is not the only measure being taken by the government of Ghana to address the country’s economic challenges. For example, government has also implemented measures to increase revenue and reduce spending, such as increasing taxes and cutting subsidies. Additionally, government has been working with international organisations such as the International Monetary Fund (IMF) to obtain financial assistance and support as the staff level agreement (SLA) has been achieved in record time, marking a significant milestone in Ghana’s quest for policy support for its post-COVID-19 economic recovery efforts”.
“ The programme will successfully reduce the overall cost of Ghana’s domestic debt. The programme has been adjudged appropriate for reducing overall cost of the country’s domestic debt, and improving investor confidence and liquidity in the domestic debt market. This, when fully completed, will afford government some fiscal space to operate – as it envisages reducing, particularly, the domestic interest cost in 2023; which is estimated at GH¢31.29billion out of the total GH¢52.55billion. These could lay the foundation for a more sustainable financial market in Ghana, and also contribute to the overall stability of the country’s economy.
The Domestic Debt Exchange programme is a significant initiative that has potential to improve the country’s fiscal health and reduce its debt burden. The proposed interest rate may have an impact on the overall level of interest rates in the economy. If government is successful in attracting a large number of investors to participate in the exchange programme and the new bonds are widely held, this could lead to an increase in overall supply of government bonds in the market.
Honourable Paul Twum Barimah therefore urged Ghanaians to continue to support the NPP government to deliver on its mandate and fulfill all the promises made to Ghanaians. He also urged them to support government with the implementation of the debt exchange programe to help stabilise the economy.