IMF is not forcing government to complete debt restructuring before granting bailout – Prof Bokpin
Economist and Finance Lecturer at the University of Ghana, Professor Godfred Bokpin says in providing a bailout to the country, the International Monetary Fund (IMF) does not require government to finish restructuring its debt.
According to Professor Godfred Bokpin, the IMF only seeks to see a significant process and credible plan for the country in restoring its debt sustainability.
“If you look at the IMF statement and also the press conference right after the staff-level agreement was reached, the IMF didn’t say that you should comprehensively restructure your debts before the staff-level agreement will go the bank. No,” he said in an interview on Joy FM’s Top Story on Thursday.
Prof Bokpin, therefore, expressed concern about the approach that government has taken to ensure its debt is restructured at all cost.
Government has as part of measures in ensuring its debt is sustainable, introduced a debt exchange programme.
This programme which was initially to affect pension funds was protested by Organised Labour. Later, they were exempted from the programme.
After their exemption, individual bondholders who weren’t involved in the domestic debt restructuring were eventually added, but it appears that the exclusion of pension funds from the programme was the catalyst for that.
Meanwhile, this has also been protested by individual bondholders and they are asking the government to exempt them.
According to the economist, the steps government is taking to restructure its debt “is making it look as though the IMF is pointing a gun to our head that if you don’t sign the country is collapsing.”
He added that the approach undertaken by the government will have an implication on the acceptability of the IMF bailout.
“Remember we are yet to open the IMF programme and see what is in there. Already, Ghana is hoping to grow domestic revenue by more than 60% from the same people. Please we can’t do this to our own people,” he appealed.
He stated that government is undertaking this current approach because it doesn’t want to engage and build consensus.
He advised government to engage with credible domestic creditor committees to build consensus on how debt restructuring can be done successfully.
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