Honorary Vice President of IMANI Africa, Bright Simons, claims that the government's 85% participation rate in the domestic debt exchange programme does not accurately reflect the amount of debt that needs to be treated in order for the government to be able to pay off its debt in a sustainable manner.

He noted on JoyNews on Saturday that while the government had first stated that it was attempting to restructure 137.2 billion cedis in debt, on the 7th of February, as the program's deadline drew near, the sum had been reduced to 130 billion cedis.

However, after the deadline, when participation had been finalized the government announced that the debt to be treated had once again been reduced to 97 billion cedis.

“Now what we’re saying is that these are gimmicks in a way and it’s nice to tell a good story and it’s true that this government has hit 85%. But the truth of the matter is that that was only because we reduced the total amount of bonds that you claim you now need to fix or you’re able to fix which is called the eligible debt.

“So you only get the 85% if you don’t use the final adjusted number which is the 130 billion, but if you use the 97 billion,” he explained.

He noted that while the 85% paints a good picture for the government’s programme, the drastic reduction in the debt base to be treated poses a big problem.

“The reason why that is important to the whole purpose of that exercise is because we can’t pay the debt. So if you’re only treating a small percentage of the problem then the bigger problem remains. So that is the key issue at stake.

“That 85% participation rate, it’s a good-looking number but it doesn’t reflect the reality of how much debt the government felt at the end of the programme, not at the beginning, at the end of the programme on 7th February was critical to be treated in order for the government to be able to continue to service its debt. That’s the argument that we are making,” he said.

Source: MyJoyOnline