Jamaica’s debt exchange programme was successful because it involved public input – Theo Acheampong explains

Dr. Theo Acheampong, has stated that in Jamaica, where the Debt Exchange programme was successful, the government supported the afflicted individuals from the beginning.

He pointed out that there haven’t been enough interactions in Ghana with those who will be impacted by the programme.

While introducing the programme on Monday, December 6, Finance Minister Ken Ofori-Atta noted that Ghana was not the first country to carry out such a domestic debt operation.

“Let me use the examples of just two nations among many others during the past ten years to demonstrate my thesis. Such operations have previously been used by Jamaica, most notably in 2010 and 2013.

“In both cases, it chose to trust the sense of responsibility of the Jamaican people
and proceeded through a voluntary approach. This approach was highly successful, as more than 99% of holders of domestic bonds participated in the exchange.

“On the contrary, in the case of Greece, the Authorities chose to undertake a coercive approach, whereby a law was passed to force people into participating,” he said.

He added “We intend to avoid as much as possible the Greek approach, as we strive to reach a consensual solution with our bondholders, which the is Ghanaian way. In any case, the good news is that the Domestic Debt Exchange has yielded positive results both in Greece and Jamaica, and many others, and will certainly put our economy on a much stronger footing. Greece has now recovered full market access. We certainly anticipate a similar success story in Ghana. I want to assure you about the Government’s commitment to do what is necessary to succeed.”

However, the Ghana Medical Association (GMA), the Ghana National Association of Teachers (GNAT), the Trades Union Congress (TUC), and the University Teachers Association of Ghana all strongly oppose the initiative (UTAG).

Dr. Acheampong stated, “There has not been as much engagement with the individuals who would be affected by this domestic exchange programme,” on Thursday, December 8 at the thought leadership session hosted by Media General with the theme “Debt Restructuring: What it implies for your investment.”

“It is worrying that decision are made sometimes in silos  without carrying on board the people who these decisions are affected.

“The reason why in Jamaica it was successful was that they carried the people who will be affected along from day one.”

Professor Peter Quartey, the director of the University of Ghana’s Institute of Statistical, Social, and Economic Research (ISSER), also stated earlier that there was a need for a larger consultation on the Debt Exchange programme.

He claimed that since the programme sought to access public monies, consensus building was necessary.

The proposal’s terms and conditions have to be agreed upon, he said.

“I think in all of these, there is a need for dialogue or consensus building,” he stated on the Ghana Tonight show with Alfred Ocansey on TV3 on Monday, December 5. It is really important because you will be handling other people’s money, and they must unquestionably agree to the terms or whatever you want to suggest.

“I am aware that there have been some preliminary consultations, but I don’t believe they have been broad enough or deepened enough, so moving forward, I believe the government should consult with labour, pension fund holders, etc. to help build consensus because we are all in this together and you cannot move forward without consultations.

“We cannot also signed onto an IMF programme if we do not agree to a debt restructuring exercise.”

Source: www.pfmtaxafrica.com/Amos Ekow Coffie