Economist advises government to address all lingering issues bothering debt exchange programme
Economist and Professor of Finance, Professor Godfred Bokpin, has urged government to address all lingering issues bothering the debt exchange programme.
According to him, reaching a staff-level agreement is not enough to revive the economy, but rather repackaging the domestic exchange programme to win all stakeholders to buy into the programme is the way to go.
According to him, if steps are not taken to re-look at the exchange programme, it will weaken the balance sheet of the participating financial institutions.
Speaking to Joy Business on the sidelines of a round table discussion on Ghana’s 2023 Budget organised by Citizens Coalition, Proffesor Bokpin called on the government to resolve all the lingering issues regarding the programme to restore macro-economic stability.
“There is still a lot of work to be done because staff-level agreement is not the same as a programme. Now, we are having to discuss staff level agreement and asking for more time because our debt is unsustainable and that is a lot of work to do. So, we are hoping that on the back of this, government will repackage the debt exchange as announced”.
“It is currently not in a good shape and actually it will systematically weaken the balance sheet of the participating financial institutions [banks] and if we are not careful, in our attempt to polish the public balance sheet we may be creating some crisis that later will come bite us”.
He has in the meantime, attributed the recent strengthening of the cedi against its major trading currencies to the staff level agreement reached between the government and the IMF.
He believes, the stability of the cedi is not sustainable, though its current performance will go a long way to help improve the economy.
“People also did not understand that the staff-level agreement is not the same as a programme. So they were actually asking the mission chief when will the money reflect. All of that contributed to the sharp recovery because people thought that with the staff level agreement, the $3 billion dollar is going to come like next week and all of that”.
“It is not driven by improved economic fundamentals; you cannot say it’s going to last for long”.
Source: Ghana News
