John Jinapor, Member of Parliament for Yapei/Kusawgu, has likened the government’s Domestic Debt Exchange Programme (DDEP) to the infamous Menzgold debacle.
He maintains that the entire programme spearheaded by the Finance Minister is not only obnoxious but one that does not bode well for holders of government bonds or, more broadly, financial sector confidence.
Following an economic downturn and difficulties in servicing its debt, the government implemented the domestic debt exchange programme to give itself more time to meet its fiscal obligations.
Without the debt exchange programme, the government warned that the nation’s economy would collapse severely.
Speaking after Finance Minister, Ken Ofori-Atta briefed Members of Parliament on Thursday on the debt swap process, the legislator said that the Minister’s decision to subject bondholders to a debt exchange is similar to the Menzgold Ponzi scheme that hit the country several years ago.
“If you digest all these, the most important thing the Finance Minister has told the people of Ghana is very simple. If you evaluate what he is doing, and evaluate what NAM 1 of Menzgold did, the two are synonymous and the same. There is no difference”, he emphasized.
The MP has also advised Leonard Chumo, who has been appointed by the International Monetary Fund (IMF) as a financial adviser to the Bank of Ghana, to exercise extreme caution.
Mr. Jinapor stated that Mr. Chumo must thoroughly review all documents provided to him by the Central Bank.
“I welcome Mr Chumo but please open your eyes at the Bank of Ghana…read and scrutinise the documents,” Mr. Jinapor said.
Ghana is currently requesting a $3 billion bailout from the IMF to bolster the struggling national economy.
Before the Bretton Woods institution’s board would evaluate Ghana’s request, one of the requirements is the domestic debt restructuring scheme.
A staff-level agreement between Ghana and the IMF was achieved in December, opening the door for the $3 billion rescue.