Former Managing Director and Shareholder of Cal Bank, Frank Adu Jnr., has projected that Ghana would return to the International Monetary Fund(IMF) for a bailout again after the current $3 billion programme with the fund.
He blamed this on the refusal of the leaders to prioritize the national interest over their personal political ambitions in decision-making.
Speaking in an interview with TV3’s Paa Kwesi Asare on the Business Focus on Monday February 19, Mr Frank Adu Jnr said “It doesn’t matter what you do, to the extent that the election is a two-horse race and the people must win the elections at all cost you will always damage your economy in the third to the fourth year of your administration.
“You do not go and do this Domestic Debt Exchange Programme and you leave T-Bills which you are using to pay the DDEP coupons, the highest coupon on the Cedi bond was about 18 percent but you are issuing T-Bills at 28, 30 percent. At that point, for instance, you could have reset, artificially bringing the interest rate down then let the market take over again.”
We have said that 17 times going to the IMF, never again, what is your view on this, he was asked.
In answer, he said “You will go again, I am being realistic because we are not being serious. We are not going to go anywhere under this particular type of democracy we are practicing. I think where we find ourselves in right now as a country it is a very difficult place. How we are going to get out of it requires a lot of self-introspection. The grandstanding, and the political generalization must stop, you are dealing with people’s lives. One of the problems we have is that when the politicians get into power they forget that now they are in power to govern and they continue to do politics and that is one of the problems that give us all these economic difficulties we have. everything is a political decision. ”
He added “I fear for the unemployed youth and what they can do to us if we do not find something for them to do with their lives.”
Regarding the DDEP, he said a compassionate approach to have been adopted by the government was to have excluded prisoners from the programme.
Mr Frank stated that the DDEP blew up all the financial throes known about how to plan pensions.
It is recalled that pensioners picketed at the Ministry of Finance to protest their inclusion in the programme. The leader of the pensioners who is also a Former Director General of the Securities and Exchange Commission (SEC) Dr Adu Anane Antwi said they fought for Issuer Exemption and not self-exempt.
He stated that the two were completely different. “If you don’t understand the issue between self-exempt and issuer-exempt you will not understand what we are doing,” he said on the Ghana Tonight show on TV3 on Wednesday, February 15.
He added “Nobody fights for self exempt, we are fighting for Issuer exempt and we haven’t gotten it. These are technical things, not even people in securities understand unless we do the analysis. We want to be at the issuer exemption status.”
They subsequently brought an end to the demonstration. Dr Adu Anane Antwi said ” We went to the Finance Ministry today to just thank [Ofori-Atta, the then Finance Minister] for granting our request, it wasn’t for any discussion. The picketing is over because we have gotten what we wanted.”
Mr Frank Adu Jnr. said “The government missed an opportunity when they were doing this unfortunate DDEP. When the DDEP was enforced the Ministry of Finance and the central bank, should have said to the institutions that they were going to reset this thing, they are going to have to issue T-Bills, we will reset by fiat, 15 percent and I think although it was an irregular sort of thought, I think the market would have supported it because the country was in the fix, this DDEP basically blew up all the financial theories we know about how to plan your pension. My first thought was my colleague pensioners, who have bought bonds, how are they going to survive?
“That was why there was so much agitation. I think the government should have, at the time they announced it, excluded pensioners even the Eurobond because if you look at the makeup of the holdings, people, 60 years and above, who were in government local bonds and Eurobonds would be very small, so a compassionate approach would have been to isolate those and even take them out.”